Counting the cost of the 2025 U.S. government shutdown: which airlines lost the most and why
Delta bears brunt as airlines tally cost of record 43 day U.S. government shutdown
The airline industry is starting to put a price tag on the longest U.S. government shutdown on record, and Delta Air Lines appears to have taken the biggest direct financial hit so far. The 43 day shutdown, which began on October 1, 2025, triggered Federal Aviation Administration (FAA) flight reduction orders at 40 major airports and led to thousands of cancellations and weaker bookings across the system.
Delta now estimates the shutdown reduced its fourth quarter pre tax profit by about 200 million dollars, a sharper, more clearly quantified blow than what rivals have disclosed to date.
Delta: 200 million dollar hit from fewer flights and softer demand
Delta told investors that the shutdown will shave roughly 25 cents per share off its fourth quarter earnings, which equates to about 200 million dollars in lost pre tax profit.
The damage came from three main channels:
- FAA mandated capacity cuts at 40 large airports
- A five to ten percent drop in bookings during the most disrupted period
- Increased refunds and rebookings tied to cancellations and schedule changes
Delta said the 43 day standoff forced more than 2,000 cancellations, as air traffic controllers worked without pay and staffing shortages led regulators to cap flying at some of the country’s busiest hubs. Despite the hit, executives have stressed that demand recovered quickly once the shutdown ended and that the carrier still expects a solid finish to the year.
Southwest: profit outlook cut as shutdown and fuel costs bite
Southwest Airlines has not put a single dollar figure on shutdown losses alone, but it has sharply reduced its full year 2025 earnings forecast and explicitly cited the shutdown as a key factor, along with higher fuel prices and severe winter weather.
The Dallas based carrier now expects earnings before interest and taxes of around 500 million dollars, down from a prior range of 600 million to 800 million dollars.
Management said the shutdown dented revenue by depressing bookings during the weeks when FAA flight restrictions were in place, particularly at large coastal and hub airports. Although bookings have since rebounded to pre shutdown trends, the one time revenue shortfall and added operational costs were enough to pull the full year profit outlook lower.
Because the company bundled the shutdown impact with fuel and weather in its guidance cut, it is harder to isolate a clean shutdown only number for Southwest. On the figures currently disclosed, however, Delta’s 200 million dollar loss remains the largest specifically attributed to the shutdown.
Alaska Air: hundreds of cancellations and a per share earnings hit
Alaska Air Group, a smaller but still national player, has also reported a meaningful impact. The carrier slashed its fourth quarter adjusted earnings per share outlook from at least 40 cents to about 10 cents, citing a mix of disruptions.
The company attributes roughly 55 to 60 cents per share of pressure to short term headwinds, including:
- About 25 cents per share from an internal IT and cloud outage
- About 15 cents per share from lost revenue tied directly to the government shutdown
- About 15 cents per share from higher fuel costs, plus a higher book tax rate
FAA flight reduction orders forced Alaska to cancel around 600 flights across its network, affecting roughly 40,000 customers.
While Alaska’s shutdown related hit is smaller in absolute dollars than Delta’s, it is significant relative to the carrier’s size and came on top of the separate technology outage.
Industry wide damage: billions in economic impact
Trade group Airlines for America (A4A) has tried to capture the broader fallout beyond individual balance sheets. When the FAA flight reduction directive reached 10 percent at affected airports in mid November, A4A estimated the daily economic impact at 285 million to 580 million dollars, depending on how effectively carriers could reaccommodate displaced passengers.
Those figures cover only the cost of complying with the flight reduction order and do not include knock on effects such as ongoing staffing issues, reduced demand from travelers who chose to stay home, or the value of passengers’ lost time.
Global industry bodies are also taking notice. The International Air Transport Association (IATA) recently warned that political shocks, including the shutdown and tariff disputes, are weighing on North American carriers’ profitability and could leave airlines in the region earning less per passenger than the global average this year.
FAA investigation adds another layer of risk
The financial fallout may not be the end of the story. The FAA has opened an investigation into whether airlines fully complied with its emergency order to cut flights by up to six percent at 40 major airports during the shutdown. Airlines that failed to follow the directive could face civil penalties of up to 75,000 dollars per non compliant flight.
Data collected during part of the shutdown showed only about two percent of flights being canceled nationwide, which has raised questions about whether some airlines maintained more capacity than regulators intended. The FAA has given carriers 30 days to document their compliance.
A fragile system exposed
For passengers, the shutdown translated into thousands of canceled flights, longer lines, and uncertainty about holiday and business travel. For airlines, it highlighted how quickly a political standoff in Washington can ripple through an already complex operation that depends on fully functioning federal aviation services.
Based on what companies have disclosed so far, Delta has taken the largest clearly quantified financial hit, Southwest has seen its profit outlook pushed lower, and Alaska has absorbed a notable earnings reduction and hundreds of cancellations. Other large carriers, including American and United, have reported significant operational disruption but have not yet put shutdown specific dollar amounts on the record.
Further details are likely to emerge as airlines report full fourth quarter results and the FAA concludes its compliance investigation, but the headline is already clear: the 43 day shutdown was costly for U.S. aviation, and Delta appears to have paid the highest bill so far.
