The Atlanta Journal-Constitution
Federal shutdown to cost Delta $25M
It also likely will delay this month’s planned debut of Airbus A220.
The head of Delta Air Lines said Tuesday that the partial government shutdown is cutting into the company’s revenue and urged Washington to get beyond the current impasse.
Delta CEO Ed Bastian said the shutdown will cost the company $25 million in revenue this month alone as fewer government contractors and employees travel.
“We are seeing some pressure on our business,” Bastian said during an investor conference call Tuesday morning. “We strongly encourage our elected officials to do their very best to resolve their differences and get the government fully open as soon as
possible.”
The shutdown, in its fourth week, has taken a toll on the air travel industry. Security checkpoints in Atlanta were backed up Monday because of fewer Transportation Security Administration agents reporting to work.
Bastian said Delta’s employees are helping to manage security queues and answer customers’ questions.
TSA officials said that at their peak, wait times at Hartsfield-Jackson International Airport were about an hour and a half long on Monday. In precheck lanes, the wait times were up to 55 minutes long.
That’s significantly higher than the longest waits at other airports. Dallas Love Field, for example, had maximum wait times of 41 minutes on Monday. The maximum TSA precheck wait time in Seattle was 14 minutes.
In Atlanta on Monday, “we had some very long lines,” Bastian said on CNBC. Wait times were more manageable during the morning rush Tuesday, mostly under 30 minutes.
The government shutdown, along with challenges from exchange rates and the timing of Easter, will limit Atlanta-based Delta’s unit revenue growth in the first quarter.
Bastian said the shutdown also will likely delay the airline’s planned debut of the Airbus A220 later this month and is affecting the certification of Airbus A330neo aircraft that Delta is due to begin flying. The FAA said this week it is calling inspectors and engineers back to work, without pay.
“We’re not taking sides on the debate, but we need to get the business moving again,” Bastian said on CNBC.
Otherwise, he said, the $25 million impact could continue as a monthly rate. “Hopefully, it doesn’t last too much longer,” Bastian said.
The Democratic Congressional Campaign Committee issued a statement Tuesday referencing Bastian’s comments and criticizing U.S. Rep. Bob Woodall, R-Lawrenceville, for voting against ending the shutdown. The DCCC said the shutdown is “threatening our national security and causing serious harm to the economy.”
“The fact that Rob Woodall would selfishly trade good paying, local jobs for a pat on the head from his Washington party bosses tells Georgians all they need to know about his misplaced priorities,” said DCCC spokesman Jared Smith in the statement.
Woodall, who narrowly held onto his 7th District seat in a race against Democrat Carolyn Bourdeaux last November, issued a statement on his votes last week saying border security was a “deciding factor.” He said he would work with anyone “who wants to crack down on drug dealers and smugglers, eradicate human trafficking and sexual slavery, and fund the government . ... Democrats should come to the table and craft a solution that works for everyone.”
During Tuesday’s call, Delta reported $3.9 billion in net income for 2018, up 23 percent from $3.2 billion in 2017.
The company grew operating revenue by 8 percent to $44.4 billion in 2018, while operating expense increased 11 percent to $39.2 billion.
But Delta is allowed to carry forward past years’ loss when determining its tax liability, and it benefited from a decrease in interest expense and a $1 billion noncash decline in income taxes.