Airlines cancel more than 700 U.S. flights as FAA-ordered shutdown cuts begin

U.S. airlines started cancelling hundreds of flights on Friday, hours after the Federal Aviation Administration ordered the cuts amid the more-than-monthlong government shutdown.

The cuts were ordered as air traffic controllers have missed their paychecks due to the government shutdown, now the longest in U.S. history. Air traffic control staffing shortages have been disrupting flights at several major U.S. airports, vexing travelers and airline executives alike.

The sudden flight cuts this week forced airlines to scramble with schedule adjustments and make sure crews are where they need to be despite the last-minute changes.

More than 700 U.S. flights were canceled as of 9 a.m. ET Friday, according to aviation data firm Cirium, about 3% of the total schedule for the day. That scale of disruption is fairly common for routine disruptions like major thunderstorms, but the Department of Transportation warned that cancellations could ramp up.

According to the FAA's order, the flight cuts will increase to 10% over the next week, beginning with 4% on Friday, 6% by Tuesday, 8% by Thursday and finally 10% on Nov. 14.

Friday's cancellation levels were the 72nd worst for the U.S. flights market since Jan. 1, 2024, according to Cirium. That period also included a Southwest Christmas meltdown after severe weather and mass delays at Delta Air Lines last summer in the wake of a CrowdStrike tech outage.

The financial impact of the latest disruptions isn't immediately clear. The cancellations could help lift airlines' unit revenue with customers competing for fewer seats, "but we also believe the prolonged shutdown and widespread cancelations will impact booking demand in the near term," Scott Group, an airline analyst at Wolfe Research, wrote in a note Friday.

The cuts come during a generally low-demand period for travel ahead of the Thanksgiving holiday, but it still sent many travelers searching for alternatives. Rental car company Hertz said that reservations over the past two days for one-way rentals spiked more than 20% from the same period last year.

Major network airlines said the disruptions were largely centered on regional flights that fly to smaller cities. United Airlines, for example, said its hub-to-hub flying and its long-haul international flights wouldn't be canceled because of the order.

American Airlines canceled 221 flights on Friday, according to CEO Robert Isom, who said the airline is "frustrated" with the reduction.

Isom said on CNBC's "Squawk Box" that the airline is working to ensure flights to all destinations still remain in place, but that the frequency of those flight paths are decreasing.

"What we've done today is we tried to minimize the impact on all of our customers — there's only 220 flights out of 6,200, flights, and we've done it in a way that really impacts our smaller aircraft," Isom said. "This level of cancellation is going to grow over time, and that's something that is going to be problematic."

Airlines offered travelers alternative flights and waived change fees for affected customers.

Experts recommend staying on top of changing schedules by checking airline apps and websites, as well as checking the fine print on travel insurance.

AAA spokesperson Aixa Diaz said the company recommends arriving at the airport 2 hours early to avoid long lines and avoid checking in a bag if possible in case flights get canceled, though flexibility will be the most important for all travelers during this period.

Travel insurance experts warn that policies don't always offer blanket protection for shutdown-related changes, and that refunds can often come down to the specific rationale used by the airline to determine the cause of delay or cancellation.

According to Lauren McCormick, a spokesperson for travel insurance platform Squaremouth, airlines sometimes won't cite causes other than general delays even during a shutdown, which could make it harder to get a refund.

Here's where flights are expected to be cut, per the FAA and DOT order:

(The airport in Las Vegas was renamed the Harry Reid Airport in 2021.)

— CNBC's Greg Iacurci contributed to this report.