OMB Report: Government Shutdown Delayed Aviation Deliveries Worth $1.9 Billion
November 20, 2013
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  • The partial shutdown of the federal government in October delayed 156 airplane deliveries worth $1.9 billion, according to a report this month by the U.S. Office of Management and Budget.

    The 16-day government shutdown, which ran from Oct. 1 to Oct. 17, delayed deliveries and the sale of aircraft.

    That’s because the Federal Aviation Administration’s Aircraft Registration was closed for the duration and employees were furloughed. In previous shutdowns, the office had been deemed essential and remained open.

    The FAA is working to clear the backlog of delayed registrations.

    In all, the OMB estimated, the U.S. economy suffered a loss of between $2 billion and $6 billion in lost output as a result of the shutdown. The effects of sending government workers home, shutting government offices and national parks and ending non-essential services rippled through the U.S. economy, affecting every kind of business – such as river guides working the Grand Canyon, residential mortgage companies that couldn’t process loans and defense contractors of all sizes.

    For the aviation industry, the shutdown came at a bad time. The fourth quarter is traditionally the busiest time of the year for shipments.

    “Imagine if no citizen of the United States could buy or sell a car, purchase or refinance a home or if the sale of any other critical goods came to a complete and grinding halt – that’s what has basically happened in business aviation,” National Business Aviation Association president and CEO Ed Bolen said at a Capitol Hill rally of aviation leaders held during the shutdown to draw attention to its effect on the industry. “Because business aviation is more regulated than other industries, the shutdown has had a far more dire impact on business aviation than for other industries.”

    The shutdown also prevented the timely and full investigation of 48 airplane accidents by the National Transportation Safety Board, the report said.

    With a large majority of its workforce furloughed, the NTSB was able to launch investigations into only two aviation accidents during the shutdown, it said, “putting it behind schedule for these and other ongoing investigations.”

    The NTSB was also forced to reschedule two important public investigative hearings, it said.

    The uncertainty of federal contracts and policies toward government employment is hurting the defense and aviation industries, the report said.

    “Trying to get the best and the brightest to come join a company that specializes in national defense or NASA-supported activities and not being able to tell them that they’re going to have a job in six months is a real tricky challenge for us,” Gregory Bloom, the president of a small business that works on design and engineering for NASA, told the Washington Post, according to the OMB report. “What keeps coming back to us is, ‘Why go work in national defense or aerospace when we can go to Google and know that we’re going to have a job?’ ”

    Among other effects of the shutdown included in the report were:

    • The shutdown delayed energy development because the Bureau of Land Management was unable to process about 200 applications for permit to drill.

    • It hindered trade by putting import and export licenses on hold.

    • It disrupted private-sector lending to individuals and businesses because banks and lenders could not access government income and Social Security numbers to verify information submitted by those seeking loans.

    • The Small Business Administration could not process about 700 applications for $140 million in small business loans.

    • There has been delays in the approval of medical products, devices and drugs by the Food and Drug Administration.

    But the report found that the most serious damage might be to the quality of the government workforce. Because the system is seen as broken, government agencies and the military could find it hard to attract and retain the “kind of driven, patriotic Americans to public service that our citizens deserve and that our system of self-government demands.”