Bloomberg News

Top Four U.S. Carriers Saw 74,500 Flights Grounded by Storms

March 10, 2014

Reagan National Airport

Workers use snowplows to clean a tarmac at the Reagan National Airport during a snow storm in Washington, D.C., on March 3, 2014. Photographer: Jewel Samad/AFP via Getty Images

The four largest U.S. airlines said winter storms that pounded the eastern part of the country forced cancellation of a total of 74,500 flights in the first two months of this year.

The biggest carriers suffered the most as the storms rolled over hubs in New York, Washington, Boston and Atlanta. Heavy snow, ice and bitter cold cost Delta Air Lines Inc. (DAL:US) $90 million in lost revenue and a pretax loss of $55 million, the Atlanta-based airline said today.

The total cost to U.S. carriers for storms extending from Dec. 1 through the end of February may be as much as $500 million on increased operating expenses and lost revenue, industry data tracker MasFlight said earlier this month. About 108,600 total flights were canceled in that period, MasFlight estimated.

“We canceled, thanks to this great weather on the East Coast, 28,000 flights in the first two months of this year,” American Airlines Group Inc. (AAL:US) Chief Executive Officer Doug Parker said in remarks at a JPMorgan Chase & Co. transportation conference in New York. “That’s up 164 percent versus last year.”

United Continental Holdings Inc. (UAL:US) grounded 23,000 flights because of the weather, while Delta parked 17,000 and Southwest Airlines Co. (LUV:US), 6,500.

“By Jan. 29, we already had more cancellations than in all of 2013,” Delta President Ed Bastian told the conference.

Canceled flights usually help airlines’ revenue for each seat flown a mile -- an industry benchmark for profitability -- because sales are spread over fewer seats. Costs on that basis-- a measure of efficiency-- rise for the same reason.

`Significantly Impacted'

American’s Parker said the carrier wasn’t “positive” on the total effect of the storms on first-quarter results. The airline will provide an estimate of the full financial toll in April, American said in a U.S. regulatory filing.

American expects revenue from each seat flown a mile to increase 2 percent to 4 percent this quarter from a year earlier, consistent with prior forecasts, Parker said.

United’s operations were “significantly impacted” by the storms, the Chicago-based carrier said in a regulatory filing today without providing a total dollar effect.

Southwest expects first-quarter unit revenue to increase three percent from a year earlier, including a less-than 1 point positive effect from the storm. Costs excluding fuel for each seat flown a mile will rise 5 percent, including 3 points related to winter cancellations, Chief Financial Officer Tammy Romo said.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net Molly Schuetz, John Lear


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Companies Mentioned

  • DAL
    (Delta Air Lines Inc)
    • $38.64 USD
    • -0.80
    • -2.07%
  • AAL
    (American Airlines Group Inc)
    • $36.63 USD
    • -1.42
    • -3.88%
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