US Orders Up to 10% Flight Cuts at 40 Major Airports Amid Longest Government Shutdown; Airlines Brace for Holiday Chaos

US airlines were scrambling on Thursday to rejig schedules and fielding a flood of customer queries after the U.S. ordered flight cuts at some of the nation's busiest airports, the latest travel disruption from the prolonged government shutdown. Transportation Secretary Sean Duffy said on Wednesday he would order steep cuts, citing air traffic control safety risks from the government shutdown.

The shutdown, now the longest in U.S. history, has forced some 13,000 air traffic controllers and 50,000 security screeners to work without pay, raising fear of travel disruptions during the upcoming Thanksgiving holiday.

Staffing shortages have already caused tens of thousands of flight delays nationwide, with airlines estimating that at least 3.2 million travelers have been affected.

Industry sources told Reuters the first round of reductions, which cuts about 4% of scheduled flights, will take effect as soon as Friday. The cuts will rise to 5% on Saturday, 6% on Sunday, and reach as much as 10% by next week if the shutdown persists.

Delta Air Lines said on Thursday it will begin reducing flights from Friday to comply with the directive, but expects to operate the vast majority of its schedule as planned, including all long-haul international services.

Most airline stocks edged lower in premarket trading, though Frontier Group gained 1% after its upbeat profit forecast on Wednesday.

CUTS THREATEN BUSY HOLIDAY TRAVEL

Unless the government reopens, the drastic plan threatens to throw holiday plans into chaos for millions of Americans traveling for Thanksgiving, marking one of the most visible ripple effects yet from the record-long government shutdown.

"They (the airlines might) have some flexibility on prices, but if this shutdown goes on much longer than that should have a negative effect overall," said David Morrison, senior market analyst at Trade Nation, UK.

Airlines including United Airlines, American Airlines and Southwest were inundated with passenger queries on social media platforms like X, as flyers sought clarity on travel plans.

"Please, you and your fellow airlines - for Thanksgiving week - issue all cancellations at least a week in advance," one X user urged in response to United's post outlining flight reductions.

"Don't make people wait to find out if they can fly home for the holiday."

The Federal Aviation Administration is expected to formally issue the order for flight reductions later in the day.

The move aims to ease pressure on controllers, with the FAA short about 3,500 staff and many working mandatory overtime and six-day weeks even before the shutdown.

"This is a fluid situation, but we believe the impact is more manageable than headlines imply...," TD Cowen's Tom Fitzgerald said, adding the timing of the shutdown's end remains the key swing factor.

Carriers stressed they would try to minimize disruption for customers and rebooking efforts were underway.

United CEO Scott Kirby said the airline will target its cuts on regional flying and non-hub domestic routes and the carrier expects to rebook many affected travelers.

"I guess the good news is that we're in a low-demand period in November," Frontier Airlines CEO Barry Biffle said on Wednesday, adding that the flight reductions could even help the carrier’s unit revenue.