In the world of airlines, something is happening that’s making even the seasoned players take a hard look at their futures. The Department of Government Efficiency, or DOGE, led by none other than Elon Musk, is slashing spending at a pace that’s shaking up the entire aviation sector. United Airlines, one of the country’s giants, just reported a staggering 50% drop in government travel, a key revenue stream. Let that sink in. This isn’t a minor dip—this is a shockwave.
This decline in government travel comes directly from DOGE’s sweeping cuts to federal expenditures, including tight restrictions on federal travel and a freeze on government-issued credit cards. These moves aren’t just bureaucratic tweaks—they are game-changers for industries that rely on steady government contracts and travel spending. The entire airline industry is feeling the impact, with over $20 billion in market cap lost in just the last month alone.
United’s CEO, Scott Kirby, laid it out clearly at the J.P. Morgan Industrials Conference: government travel accounts for about 2-3% of their business. It’s a small piece of the pie, but it adds up. And when that piece shrinks by half, it’s no longer just a minor nuisance—it’s a crisis. United isn’t sitting idly by. They’re refocusing on leisure travelers, hoping to cushion the blow, and even retiring 21 aircraft to trim costs. Yet, the damage is already done. The stock has slipped by 3% recently, mirroring a larger industry trend.
Delta and American Airlines aren’t faring much better. They’ve both adjusted their earnings forecasts downward, citing not only the decline in government travel but also broader economic uncertainty and reduced demand. When the aviation sector is already up against rising fuel prices and inflation, this new squeeze from DOGE’s budget cuts is adding pressure to an already overburdened system. The results are painful.
There’s a bigger story behind this, though. These cuts are part of DOGE’s larger effort to reign in the federal deficit, which has spiraled out of control. Some see this as a necessary move to curb wasteful spending, but others warn that we could be heading into a storm. Essential services could face disruptions, and the economy could take another hit. The question is: how much more can these industries and the economy absorb before we reach the tipping point?
The bottom line is simple: what’s happening with DOGE’s aggressive cuts isn’t just an airline problem—it’s a broader, systemic issue. The airline industry may be feeling the pain now, but the ripples are going to be felt across every sector that relies on government spending. And with the way things are going, we’re just getting started. The question now isn’t whether the airline industry will recover, but whether we’ll see more industries follow suit into a downward spiral. Time will tell, but the signs are clear—we’re entering uncertain waters.
Sources:
https://airlinegeeks.com/2025/03/12/united-says-government-travel-down-50/
https://www.chicagobusiness.com/airlines-airports/united-airlines-moves-blunt-effects-doge
https://thehill.com/homenews/administration/5166679-donald-trump-doge-executive-order-cut-costs/
https://www.newsweek.com/doge-spending-cuts-findings-one-month-trump-administration-2034150