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U.S. government shutdown holds up FAA approval of aircraft, routes

Published 01/14/2019, 12:17 PM
© Reuters. A traveler checks her baggage at the Southwest Airlines terminal at LAX airport in Los Angeles

By Tracy Rucinski

(Reuters) - Federal Aviation Administration (FAA) approval of aircraft such as Boeing's (N:BA) MAX 8 and new routes like Southwest Airline Co's (N:LUV) Hawaii launch are on hold due to the U.S. government shutdown, delaying commercial operations.

On Monday, Southwest Airlines (N:LUV) said its plans to launch service to Hawaii early this year are on hold because the FAA groups that oversee the route authorization process are on furlough.

In a statement, Southwest said it will not announce any timelines for selling or operating flights to Hawaii until it receives the necessary authorization.

Meanwhile, no. 1 U.S. carrier American Airlines Group Inc (O:AAL) said it has taken delivery of two new MAX 8, but the planes are sitting idle in Tulsa, Oklahoma awaiting FAA approvals required for commercial operation.

American, with a fleet of around 950 aircraft, said it did not see any impact from the delay on its flight schedule or customers.

United Airlines (O:UAL) and Delta Air Lines (N:DAL) are among other U.S. carriers awaiting FAA certification of new aircraft. The airlines did not reply to requests for details.

A partial U.S. government shutdown over President Donald Trump's demand for $5.7 billion to build a wall along the U.S.-Mexico border entered its 24th day on Monday.

Talks between Trump and congressional Democrats remained stalled even as some of his fellow Republicans called on the president to cut a deal, as tension mounted nationwide.

Analysts said they did not expect a major impact on large airlines' capacity as a result of FAA certification delays, but will be awaiting management comments about the effect of a prolonged shutdown on travel and operations during fourth-quarter conference calls.

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Delta reports fourth-quarter results on Tuesday, followed by United on Wednesday and American and Southwest next week.

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