Bloomberg Businessweek

Episode: Duffy Warns of More Flight Cuts If Government Shutdown Drags On

Date: November 7, 2025
Hosts: Carol Massar, Tim Stenovec

Episode Overview

This episode centers on the escalating impact of the ongoing US government shutdown, particularly on the airline industry, as the busy holiday travel season approaches. Bloomberg Intelligence’s George Ferguson discusses how the shutdown may force further flight cuts and airline disruptions, while LinkedIn’s Chief Economist Karen Kimbrough gives a real-time snapshot of the US labor market. Later, market volatility and portfolio strategy are examined with Alexis Brown Roberts, and Rick Smith of Axon Enterprise discusses company growth, acquisitions, and tech sector challenges.

Key Segments and Insights

1. Airlines, Government Shutdown, and the Holiday Rush

With: George Ferguson, Bloomberg Intelligence Aerospace/Defense/Airlines Analyst
Segment Start: 01:47

• Status at Newark and National Outlook

  • George Ferguson just arrived at Newark after a flight from Miami. The experience was smooth, as carriers are making initial cuts (estimated at 10% or less) focused on the 40 most important airports.

    “If you’re going to a core market for an airline...they’re going to get that traffic through.”
    – George Ferguson (02:18)

• Thanksgiving Travel Disruption Risks

  • With less than three weeks to Thanksgiving, concerns rise over a projected 20% disruption (per Secretary Sean Duffy) if the shutdown continues, especially as leisure travel picks up at month’s end.

    “If we don’t have the government shutdown stopped, Thanksgiving will be an absolute mess because I would expect there’ll be even more cancellations.”
    – George Ferguson (03:27)

• Airline Profitability & Financial Impact

  • Short shutdowns might let airlines trim underperforming routes for slight margin gains; a prolonged disruption could seriously hit earnings in Q4, particularly if it extends into the core holiday periods.

    “If we get into Thanksgiving and this is still going on...then we’re going to start to get much more concerned...about profitability.”
    – George Ferguson (04:54)

• Corporate Jet Travel Update

  • The private aviation sector remains robust, unaffected by disruptions, with strong backlogs for Bombardier and Embraer.

    “That market continues to stay strong...people came to private aviation after the pandemic and it appears they’ve stuck around.”
    – George Ferguson (05:37)

2. Labor Market Update – Real-time Data from LinkedIn

With: Karen Kimbrough, Chief Economist, LinkedIn
Segment Start: 09:09

• Current Labor Market Assessment

  • Described as “softening,” with gradual fragility and slight decline in hiring rates since October.

    “Softening.”
    – Karen Kimbrough, when asked to sum up the jobs market in one word (09:27)

• Wage & Job Market Disparities

  • Contrary to expectation, hiring shows relative strength in construction, leisure, and hospitality, sectors that predominantly hire hourly/lower-income workers, while overall confidence and hiring rates continue to ease.

• Trends on LinkedIn: Skills & AI

  • Marked increase in mentions of layoffs; employees are quitting less, suggesting market caution.
  • Massive surge (70%) in demand for AI literacy skills—anticipated to transform over 85% of roles on the platform in coming years.

    “They want candidates who can...know how to use AI...70% increase in jobs looking for AI skills.”
    – Karen Kimbrough (11:29)

3. Market Volatility and Investment Strategy

With: Alexis Brown Roberts, CEO & Portfolio Manager, Alexis Investment Partners
Segment Start: 13:29

• Market Mood & Correction

  • Current environment described as “volatile,” with recent strong recovery but now due for an expected pullback due to rich valuations.

    “Right now, volatile is a pretty good way to describe the market.”
    – Alexis Brown Roberts (13:59)

• Government Shutdown and Market Impact

  • Historically, markets initially brush off shutdowns, but a prolonged standoff could disrupt seasonal spending and market resilience.

    “The longer that this drags out, the more that it’ll be difficult for the stock market to really continue to brush it off.”
    – Alexis Brown Roberts (16:35)

• Sector Positioning

  • Shift toward portfolio diversification as tech weighting in S&P 500 surpasses previous records. Preference for incremental adds rather than aggressive tech overexposure.

    “Should you go diving straight into even more big tech at these valuations? That depends...”
    – Alexis Brown Roberts (17:51)

4. Spotlight: Axon Enterprise – Growth, Acquisitions, and Valuation

With: Rick Smith, Founder and CEO, Axon Enterprise
Segment Start: 22:31

• Stock Volatility vs. Company Growth

  • Despite strong operational results and high growth rates, the stock saw a sharp drop post-earnings, attributed to one-off accounting charges and investor sensitivity to high valuations.

    “Don’t even look at the stock price...where we stay focused is building the long term business.”
    – Rick Smith (22:51)

  • Explained that stock-based compensation, linked to high performance, temporarily dents GAAP earnings, while adjusted results remain strong.

• Sector Allocation and Future Bets

  • Revenue mix has shifted toward software and services (now ~61%), but hardware (notably Tasers) remains crucial, especially with opportunities for international expansion.
  • New acquisitions target the mission critical voice and AI space, aiming to digitally transform emergency and law enforcement communications.

    “AI plus Voice now is a very magical moment...10% of our core business bookings this year are going to be on our AI services.”
    – Rick Smith (25:47, 26:51)

• Surveillance, Ethics, and Community Backlash

  • Recognizes growing concern over surveillance. Axon maintains an Equity and Ethics Advisory Council for preemptive ethical review and aims to balance public safety with privacy.

    “We build safeguards in that help minimize the risk of abuse while maximizing the opportunity.”
    – Rick Smith (30:07)

• Federal and Local Agency Use

  • Axon’s platform allows government customers to control data sharing, tailored to local/state regulations and community preferences rather than a one-size-fits-all approach.

• Acquisition Pipeline

  • Pausing on further acquisitions after two strategic purchases in rapid succession, citing their complementary strengths and unexpected opportunity.

Notable Quotes

• On Airline Disruptions:
  “If we don’t have the government shutdown stopped, Thanksgiving will be an absolute mess...”
  – George Ferguson (03:27)

• On Labor Market Mood:
  “Softening.”
  – Karen Kimbrough (09:27)

• On Tech Labor Evolution:
  “70% increase in jobs...looking for AI skills. We think more than 85% of the members...are in roles...to be transformed by AI.”
  – Karen Kimbrough (11:29)

• On Market Pullback:
  “Should you go diving straight into even more big tech at these valuations? That depends...”
  – Alexis Brown Roberts (17:51)

• On Stock Price Volatility:
  “Don’t even look at the stock price...where we stay focused is building the long term business...”
  – Rick Smith (22:51)

• On Surveillance & Ethics:
  “We build safeguards in that help minimize the risk of abuse while maximizing the opportunity.”
  – Rick Smith (30:07)

Timestamps for Key Segments

• Airlines & Government Shutdown (George Ferguson): 01:47 – 06:38
• Labor Market/Labor Market Data (Karen Kimbrough): 09:09 – 13:03
• Market Outlook & Strategy (Alexis Brown Roberts): 13:29 – 18:47
• Axon Enterprise Interview (Rick Smith): 22:31 – 32:51

Summary

The episode offers a comprehensive snapshot of challenges facing US travel, labor markets, and investors due to the ongoing government shutdown and broader economic shifts. Analysts warn of severe fallout in air travel if the standoff persists, while LinkedIn’s real-time data points toward a softening but evolving job market increasingly oriented around AI skills. Investors are counseled to diversify as markets display growing volatility and tech sector concentration. Meanwhile, Axon Enterprise demonstrates the rewards and risks of tech-forward growth, acquisition strategies, and the critical importance of public trust amid expanding surveillance capabilities.