The Senate passed a bill this morning putting an end to the FAA shutdown in a pro forma session lasting less than a minute. While the bill only temporarily extends the FAA’s funding as Congress goes into recess until September, it will put thousands of FAA employees back to work.
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Congress debated over the terms of the deal, allowing the deadline for a new budget to pass with no resolution, forcing thousands of FAA employees into furlough and partially shutting down FAA operations. Some 74,000 government employees and contractors have gone without paychecks for the last couple weeks while Congress has listened to proposed cuts to the budget, and the government lost an estimated $30 million a day in revenue from ticket taxes.
One main area of contention was a provision that would eliminate a program subsidizing flights to small regional airports meant to benefit rural farmers. However, despite Democrats’ objections to the provision, the bill passed today will eliminate rural subsidies, but with one caveat: in any case in which the cutbacks would result in “undue difficulty” in accessing a larger airport, they will be waived. The Department of Transportation is expected to use that caveat to essentially negate the cutbacks. The bill now only awaits President Obama’s signature.
Airline Stocks to Watch: United Continental Holdings (NYSE:UAL), US Airways Group (NYSE:LCC), Delta Air Lines (NYSE:DAL), AMR Corp. (NYSE:AMR), Southwest Airlines Co. (NYSE:LUV), JetBlue Airways Corp. (NASDAQ:JBLU), Alaska Air Group (NYSE:ALK), Hawaiian Holdings (NASDAQ:HA), Orbitz Worldwide, Inc. (NYSE:OWW), Expedia Inc. (NASDAQ:EXPE), Travelzoo Inc. (NASDAQ:TZOO), Universal Travel Group (NYSE:UTA), and Priceline.com (NASDAQ:PCLN).