Street Calls of the Week
Investing.com - The ongoing U.S. federal government shutdown has not significantly disrupted airline operations despite concerns about air traffic control staffing, according to TD analysis released Friday. This resilience is particularly noteworthy for United Airlines (NASDAQ:UAL), which has demonstrated strong financial performance with a 68% return over the past year and maintains a robust EBITDA of $8.3 billion.
While some airports have experienced delays, including Hollywood Burbank Airport being remotely managed for six hours on October 6, there have not been prolonged ground stops or notable spikes in cancellations. Transportation Secretary Sean Duffy reported approximately 10% of air traffic controllers have not been showing up during the shutdown, which is now in its tenth day. According to InvestingPro, United Airlines maintains a "GREAT" overall financial health score, suggesting strong operational stability during challenging periods.
TD analysts note that with government employees set to miss paychecks soon, the next ten days will be critical in determining whether the shutdown becomes a significant drag on air travel. Chris Kruerger of TD Cowen’s Washington Research Group expects the shutdown to continue into next week but believes travel disruptions could serve as a catalyst for resolution.
During Delta’s third-quarter earnings call on October 9, management stated the shutdown’s impact is currently less than the approximately $1 million per day experienced during the 2019 government closure. This represents less than 0.6% of Delta’s projected daily revenue for the fourth quarter of 2025.
TD maintains "Buy" ratings on United Airlines (NASDAQ:UAL) at $101.34 and Delta Air Lines (NYSE:DAL) at $59.57, viewing the industry’s operational resilience as reassuring and recommending investors consider any shutdown-related weakness as a buying opportunity. InvestingPro analysis reveals that UAL trades at an attractive P/E ratio of 10.08, with analysts maintaining a bullish consensus and a high price target of $149. Investors can access detailed valuation metrics and 8 additional exclusive ProTips through InvestingPro’s comprehensive research report.
In other recent news, United Airlines has received approval from the Federal Aviation Administration (FAA) for its first mainline aircraft equipped with Starlink internet service. This certification allows United to proceed with its inaugural commercial flight featuring the service on October 15, departing from the Newark/New York area. This development follows less than a year after United signed an agreement with SpaceX to provide Starlink Wi-Fi service across its fleet. In another update, the FAA has extended an order limiting flight operations at Newark Liberty International Airport through October 24, 2026, which affects one of United’s major hubs. These flight restrictions will control the rate of arrivals and departures at the airport. Additionally, the U.S. Transportation Department has reported a slight increase in sick calls among air traffic controllers since the government shutdown began, potentially causing flight delays. The Essential Air Service program, which supports over 170 communities, may run out of funds soon if the shutdown continues.
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