Airlines, business groups warn of chaos if US restricts flights

Major airline, travel and business groups warned that barring border processing at Newark or other major US airports ​could lead to chaos, strand thousands of tourists and Americans trying to get home, and prevent ‌crucial cargo shipments.

On Thursday, Homeland ‌Security Department Secretary Markwayne Mullin said the Trump administration could soon stop processing international travelers and cargo at New Jersey’s Newark Liberty International Airport, a major gateway into New York City, because local law enforcement in the state ‌were not assisting federal immigration officials.

Mullin has repeatedly said he could also halt immigration processing at more than a dozen other airports in so-called “sanctuary cities,” including Boston, Denver, Philadelphia, Chicago, Los Angeles, Seattle and San Francisco.

Halting customs operations at major US airports “threatens to cause unnecessary chaos throughout the nation’s air transportation system,” said the US Chamber of Commerce, Airlines for America, National Retail Federation, US Travel and other groups in a joint statement on Friday.

“International aviation networks are highly interconnected, and operational changes at a small number of ​gateway airports will quickly ripple across the country, negatively impacting travelers, cargo shipments, supply chains, and ‌the communities that depend on those connections,” they said.

The White House did not immediately comment. However, three airline executives told Reuters on Friday that they did not believe the Trump administration would immediately move ahead with any restrictions.

Mullin had complained that local police were not ensuring that federal immigration officials could enter and exit a New Jersey detention centre and he warned he could reassign customs officials from the airport.

Shutting down all international ​flights in the ‌18 airports serving the sanctuary cities would result in a more than $70 billion hit to the economy ‌and impact 68 million international passengers per year, the US Travel Association said.

Over 20,000 international passengers land at Newark alone every day, including about 14,000 US citizens, it said.

“American travelers from across the US could find their flights ‌into the US ‌diverted or canceled,” the group said.

“Millions of international visitors will face the same disruption, and with the FIFA World Cup weeks away, ‌the damage to America’s reputation as a welcoming destination would be significant and lasting.”

Foreign visitors are expected to stream in for next month’s football World Cup, jointly hosted by the US, Canada and Mexico. The final will be held on July 19 in East Rutherford, ​New Jersey, about 12 miles from Newark airport.

A shutdown could also imperil billions of dollars in imported cargo like pharmaceuticals and semiconductor chips.

“Air cargo cannot be rerouted without severe economic consequences,” said the Cargo Airline Association.

Separately, US-based investment firm Castlelake, L.P. on Friday said it is in the early stages of considering a ‌possible offer for British budget carrier easyJet, sending the airline’s ​US-traded shares up nearly 10%.

No approach has been made ‌to the board of ‌easyJet and there can be no certainty that any offer will be made, nor as to the terms of any offer, Castlelake said ‌in a statement.

Under UK takeover rules, Castlelake must make a firm offer by June 26 or walk away from a deal.

The news comes a week after easyJet warned that its full-year outlook remains uncertain as the Iran war drives up fuel costs and bookings weaken for the peak summer season.

The company has a market capitalisation of ​3.02 billion pounds, according to data compiled by LSEG. The ‌carrier’s shares closed at 398 pence on Friday and are down over 22% this year.

The Iran conflict has been disrupting global aviation, sending jet fuel prices up more than 80% since late February and forcing airlines to raise fares, cut capacity or absorb margin pressure as flows through ​the Strait ‌of Hormuz are constrained.

Castlelake had in January entered talks to ‌acquire Spirit Airlines, months before the bankrupt carrier permanently ceased all flight operations and went out of business.

The investment firm last year launched Merit AirFinance, ‌an aviation lending platform ‌backed by $1.8 billion in deployable capital, which aims to provide debt financing to airlines ‌and aircraft lessors for new and used aviation assets.

In 2021, easyJet rejected an offer from rival Wizz Air, opting instead to raise $1.7 billion from shareholders and go it alone in ​an industry battling to recover from the pandemic.

In a separate development on Thursday, IndiGo and ​Air India, India’s two largest airlines, have sharply cut their planned domestic flights for June ‌and July, sources familiar with ‌the matter said, as the industry grapples with a rise in jet fuel costs in the wake of the Iran war.

IndiGo has cut around 7%-10% of its planned domestic flights for the period, ‌while Air India has cut 22%, the sources said, marking a significant pullback by the two carriers that together control around 90% of India’s domestic air passenger market.

The sources declined to be named as they were not authorised to share the information.

Agencies