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Shutdown increasing corporate travel risks

By Admin

As reported by Michael B. Baker for Business Travel News


As the U.S. government shutdown turned three weeks old, the odds of tangible and lasting effects on the travel community — disrupted trips or, even worse, security risks — are getting higher.

In the initial weeks, the impact on corporate travel was more on the level of a “hassle,” such as reported longer lines at some security checkpoints, said Bruce McIndoe, founder and president of global travel risk management firm WorldAware (formerly iJet).

If the shutdown persists for a few more weeks, however, there is “an increasing threat to the system” as Transportation Security Administration personnel, air traffic controllers, inspectors and other critical members of the aviation industry don’t receive paychecks, he said. “You’ll have individuals peel off and look for other opportunities for income, and you’ll start having holes,” McIndoe said. “People will be pushed to work overtime, which creates more stress. In the unlikely event that this thing moves into months, then you just had a rapidly escalating risk of a catastrophic failure in the system.”

Air traffic control, understaffed before the shutdown began, soon could reach the point at which the government will need to reduce flight volumes, which will force carriers to cancel some flights, McIndoe said. An extended shutdown could lead to entire airports being shut down, with only a “subset of the airports” running, he said.

As of Thursday, TSA was still reporting that most employees are showing up for work. The 5.1% unscheduled-absence rate compared with 3.3% a year earlier, according to assistant administrator for public affairs Michael Bilello. More than 95% of passengers spent less than 15 minutes in line, he said. Should that absence rate go up, however, it could especially cripple smaller airports, McIndoe said. “If they don’t have enough staff to staff a security lane, they won’t turn it on,” he said. “If they got to the point where they couldn’t open a lane at all, what would they do? There are only three or four lanes in smaller airports, so they would have to shut down.”

The more prolonged the shutdown, the longer it will take to recover, as well, particularly if ATC workers opt for other jobs or early retirement. “You don’t just hire somebody and throw them in a seat and say, ‘Be an air traffic controller,'” McIndoe said. “It takes month and months before people are trained and able to sit on those seats, so there’s lingering damage to the system.”

Outside of that, the shutdown has halted federal inspections of aircraft, which will build up as the shutdown persists, he said. In addition, investigators from the National Transportation Security Board have been sidelined from some active investigations, said Larry Willis, president of the AFL-CIO’s Transportation Trades Department.

The shutdown also has stalled modernization efforts of the air traffic control system, he said. “The modernization efforts the FAA has put forward require constant and ongoing work, and this really takes those efforts off course,” Willis said. “When you put critical modernization efforts on the shelf for three weeks, it’s going to take months to ramp those efforts back up.”

While there’s not much travel buyers can do beyond pressuring their elected officials to end the shutdown, they should caution their travelers to allow more time to get through airports in case of disruptions, McIndoe said. Should it reach the point of flight cancellations, corporate travelers might look to defer trips when possible. However, he said putting travelers in cars instead of planes is not ideal, given the substantially higher risk of accidents in car travel versus air travel.

The shutdown’s impact on the travel industry as a whole will grow, as well. The federal government shutdown in late 1995 and early 1996 lasted 21 days, a record until the current shutdown. It led to millions of dollars in losses for airlines and other tourism sectors, and about 200,000 applications for passports were not processed during that period, according to a 2010 Congressional Research Service report.