The Shutdown Has Thrown New Uncertainty Into Holiday Air Travel—and Hit Airline Stocks

Airports can seem like zoos around the holidays. This year, capacity cuts stemming from the government shutdown could cause a little extra chaos.

Transportation Secretary Sean Duffy yesterday said flight capacity would be reduced by 10% at select airports beginning Friday to keep the workload sustainable for understaffed, and currently unpaid, air traffic controllers. Some 5 million to 6 million travelers have flown for Thanksgiving, the busiest holiday for travel, in recent years, according to the American Automobile Association.

Duffy said officials would today share which 40 airports will be impacted. The DOT and Federal Aviation Administration hadn’t published an official list on their websites or social media accouts as of 4 p.m., but some news outlets reported the cutbacks would hit most major airports. Officials will start with a roughly 4% reduction this weekend and cut back further as needed, The Wall Street Journal reported.

It’s unclear when Democrats and Republicans will reach a deal to end a shutdown that has stretched into its second month; Nearly 45% of those wagering on Polymarket, a predictions market, don’t expect a resolution until at least Nov. 16.

The uncertainty weighed on some airline stocks Thursday. Shares of the biggest U.S. airlines fell throughout the day, with American Airlines (AAL) down by about 2% at closing, and Delta (DAL) and United (UAL) airlines off by roughly 1%. The JETS ETF, which includes airline stocks, was down about 1.5%.

Duffy said the reductions would ensure safety and reduce disorder going into the busy holiday season. “There will be more disruption. Would I still book? If there’s deals out there, I’d book,” Duffy said during a Fox News interview he shared on X Thursday morning.

AAA spokeswoman Aixa Diaz said it’s hard to gauge how such a dynamic situation will influence Americans’ travel plans by, for instance, driving rather than flying.

“As we learn more about which airports are affected, we’ll get a better sense of the impact of the reduction,” Diaz said. “Some holiday travelers may wait closer to Thanksgiving to decide what they want to do.”

The airline industry group Airlines for America said it was working with the federal government “to understand all details of the new reduction mandate and will strive to mitigate impacts to passengers and shippers.”

This article has been updated since it was first published to reflect closing share prices and add context.