Trump Urges Quick Resolution to DHS Shutdown Impacting Air Travel
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: CNBC
- DHS Shutdown Impact: Trump emphasized during a Cabinet meeting that the Department of Homeland Security shutdown has lasted over a month, severely disrupting air travel as Transportation Security Administration agents are missing work due to unpaid status, leading to long airport lines and increasing pressure on lawmakers to reach a deal.
- Trump's Firm Stance: Trump warned Congress that they must end the shutdown immediately or face 'very drastic measures,' although he did not specify what those measures would be, creating ambiguity that may heighten market concerns regarding government operational uncertainties.
- Bipartisan Negotiation Stalemate: Despite Senate Republicans proposing a compromise to fund 94% of DHS, Democrats rejected the proposal due to the lack of operational changes for Immigration and Customs Enforcement, highlighting deep partisan divides over immigration policy.
- Congressional Recess in Jeopardy: As the negotiation deadlock continues, the Senate Majority Leader indicated that it remains an 'open question' whether Congress can begin its scheduled two-week recess this weekend, potentially impacting legislative processes and normal government operations.
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Analyst Views on DAL
Wall Street analysts forecast DAL stock price to rise
18 Analyst Rating
18 Buy
0 Hold
0 Sell
Strong Buy
Current: 66.860
Low
77.00
Averages
83.50
High
90.00
Current: 66.860
Low
77.00
Averages
83.50
High
90.00
About DAL
Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo throughout the United States and around the world. The Company has hubs and markets in Amsterdam, Atlanta, Bogota, Boston, Detroit, Lima, London-Heathrow, Los Angeles, Mexico City, Minneapolis-St. Paul, New York-JFK and LaGuardia, Paris-Charles de Gaulle, Salt Lake City, Santiago (Chile), Sao Paulo, Seattle, Seoul-Incheon, and Tokyo. Its segments include Airline and Refinery. Its airline segment is managed as a single business unit that provides scheduled air transportation for passengers and cargo throughout the United States and around the world and includes its loyalty program, as well as other ancillary businesses. Its refinery segment operates for the benefit of the airline segment by providing jet fuel to the airline segment from its own production and through jet fuel obtained through agreements with third parties. The refinery's production consists of jet fuel as well as non-jet fuel products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Severe Staffing Shortages: At Houston's George Bush Intercontinental Airport, absentee rates exceed 40%, while Hobby Airport reports 55%, significantly reducing TSA's screening efficiency and negatively affecting the travel experience for passengers.
- Airlines Unite in Demand: CEOs from major airlines including American Airlines and Delta have jointly written to Congress demanding an immediate end to the shutdown, stating that the situation of TSA workers not receiving paychecks is “unacceptable” and warning of increased costs from flight delays and passenger rebookings.
- Escalating Economic Impact: With fuel prices rising due to the US-Iran conflict, airlines face additional financial pressures, with Delta estimating a $400 million loss in March alone, compounding operational challenges within the industry.
See More
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- Fuel Price Surge Impacts Fares: Fuel prices at major U.S. airports have reached $3.98 per gallon, up nearly 60% since February 28, forcing airlines to raise ticket prices to cover rising costs, with airfare expected to increase by 20% this year.
- Strong Demand Persists: Despite rising fares, airlines like Delta and American Airlines report that demand remains robust, particularly for high-end leisure travel, indicating consumers' willingness to continue flying, which may encourage airlines to maintain flight schedules in the future.
- Security Delays Worsen: An impasse in Congress over funding for the Department of Homeland Security has led to nearly 500 TSA officer resignations, resulting in security wait times exceeding three hours at major U.S. airports, negatively impacting traveler experiences and potentially reducing future travel willingness.
- Government Intervention Measures: President Trump has pledged to sign an order to ensure over 50,000 TSA officers are paid, yet the deployment of ICE officers may cause traveler unease, further affecting passenger throughput in the coming days.
See More
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- Surging Oil Prices: The blockage of the Strait of Hormuz has caused Brent crude oil's May contract to surge over 55% in March, marking the largest monthly gain since 1998, leading to economic pressures on U.S. consumers in areas like travel and mail delivery.
- Postal Service Adjustments: The U.S. Postal Service plans to implement an 8% temporary fuel surcharge on packages and express mail starting in late April, lasting until 2027, to cover rising operational costs, although this measure requires regulatory approval.
- Airline Response: United Airlines intends to cut back on some lower-profit flights and anticipates oil prices reaching $175 per barrel, which could increase its fuel costs by $11 billion, more than double its previous highest profits, resulting in higher ticket prices for travelers.
- Declining Consumer Confidence: According to the University of Michigan's survey, the consumer confidence index fell nearly 6% in March to a historic low, indicating worsening economic expectations due to the war and rising inflation concerns among consumers.
See More
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- Delta Air Lines Performance: Delta Air Lines shares are down only 3% for the year, outperforming the S&P 500 despite industry challenges.
- Jet Fuel Price Impact: The airline is facing a significant 62% increase in jet fuel prices since February, which typically affects profitability.
- Industry Profit Estimates: There has been a general reduction in profit estimates across the airline industry, yet Delta's stock remains relatively stable.
- Unusual Market Behavior: The current performance of Delta's stock is noted as unusual for the airline industry, which is typically more volatile.
See More
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- Market Volatility Intensifies: Following Trump's announcement to extend the pause on attacks against Iran's nuclear facilities, the S&P 500 recorded its largest one-day loss in over two months, with crude prices surpassing $110 per barrel, reflecting the market's sensitivity to geopolitical risks.
- AI Legal Victory: AI firm Anthropic secured a preliminary injunction in federal court against the Pentagon's blacklisting, with the judge labeling the action as “classic illegal First Amendment retaliation,” which could affect government collaborations with AI companies.
- Fed Nomination Controversy: Senator Elizabeth Warren issued a scathing letter to Kevin Warsh, Trump's pick for Federal Reserve Chair, stating his past failures should disqualify him from promotion, potentially influencing the Fed's future policy direction.
See More
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- Impact of Shutdown: The shutdown resulted in missed paychecks for Transportation Security Administration (TSA) agents and long airport lines, and the bill's advancement is expected to alleviate this crisis, ensuring normal operations resume before the upcoming two-week recess.
- Escalating Political Tensions: Significant disagreements exist between Democrats and Republicans over ICE funding, with Democrats insisting on reforms while Republicans plan to restore ICE funding through budget reconciliation, potentially exacerbating tensions between the two parties.
- Trump's Intervention: Trump announced via executive order that he would pay TSA agents, claiming Democrats created a national crisis, demonstrating his determination to resolve the issue through direct action before Congress's recess.
See More
