Analysis: US politics taking an increasing toll on travel

The policies of the current US administration and federal government shutdown, now in its sixth week, are casting a growing cloud over travel and tourism.

 

The US Travel Association (USTA) warned this week of travel “chaos” around Thanksgiving on November 27 if the shutdown continues, with president and chief executive Geoff Freeman saying: “Travellers will pay a heavy price in terms of delays, cancelations and lost confidence in air travel.”

 

The Federal Aviation Administration (FAA) reported at the weekend that half of the 30 ‘core’ US airports are “experiencing staffing shortages and nearly 80% of air traffic controllers are absent at New York-area facilities”, with staffing levels strained “at multiple facilities” causing “widespread impacts” across the system.

 

The FAA warned it may have to further reduce air traffic for safety reasons, with air traffic controllers “under immense stress and fatigue”.

 

Air traffic controllers distributed leaflets at 22 airports last week stating: “No one should be under the illusion that it’s business as usual for aviation safety.”

 

National parks also reported the impacts of the shutdown “piling up” even where parks remain open.

 

However, the impact of the Trump administration’s policies was being felt before the shutdown began on October 1.

 

Iata reported North American air traffic down year on year in September albeit only 0.1%, but that was against a 1.8% increase in capacity, marking an eighth consecutive month of decline in passenger load factor.

 

That was in contrast to a 3.6% rise in air passenger traffic worldwide year on year in September, only marginally behind a 3.7% increase in air capacity.

 

US domestic traffic was down 1.7% year on year and, while North American international traffic rose by 2.5%, capacity increased by 4.3% meaning a fifth month of decline in load factor when international demand globally was up 5.1% in the month.

 

There was a 3.2% increase in passenger traffic on transatlantic flights year on year in September, down by one percentage point on August.

 

But growth in passenger traffic on most major international route areas to and from the Americas was below the industry average in September and passenger loads to and from the Americas fell on most international routes.

 

Only traffic between Europe and South America exceeded the global average with a 10% increase year on year driven by significant growth in traffic from Spain (+11%) and Italy (+14%).

 

Traffic between North and South America rose 1.1% after contracting in August, but passenger volumes on flights between North America and Central America declined year on year.

 

Air traffic between North America and Asia saw the weakest expansion of major Asia-Pacific routes, growing by 0.9% year on year in September, down by five percentage points on August, with traffic between India and North America falling 7.4%.

 

The Lufthansa Group blamed a “temporary slowdown on the North Atlantic” for a 2.2% fall in its revenue per available seat kilometre – a standard industry measure – in results for the three months to September.

 

The Global Business Travel Association (GBTA) confirmed US government actions “continue to cast a shadow over business travel spending, volume and revenue” as it released the results of its latest members’ poll.

 

These showed more than one third of global buyers (35%) expect travel volumes to fall this year by an average one fifth due to US government action and 30% of buyers forecast a spending fall.

 

Three out of five accommodation suppliers (59%) expect turnover to be down. One in three travel management companies (32%) reported a fall in revenue, albeit this was down from 48% in June, and 50% of airline respondents expected a fall – up from 39% in June.

 

GBTA’s poll was conducted on October 2-15 and drew almost 600 responses from corporate travellers, buyers and suppliers.