Jan 22 - With 4,500 flights canceled in two days because of a snowstorm, airlines are facing their third weather disruption this year, but the blow is so far being cushioned by consolidation and other industry trends. Conway G. Gittens reports.
This is what it looks like outside with Northeastern cities under at least a foot of snow... And this is what it looks like inside their airports: Passengers stranded overnight with over 45-hundred flights cancelled in a two-day period, according to Flight Aware, with New York City area airports hit the hardest. Airlines are coping with the third weather-related disruption in less than a month. How much of that hits the bottom line can vary from storm to storm says, Heny Harteveldt, a travel industry analyst at Hudson Crossing. SOUNDBITE: HENRY HARTEVELDT, TRAVEL INDUSTRY ANALYST, HUDSON CROSSING (ENGLISH) SAYING: "The costs for the airlines are really three primary areas: first of course is the cost of lost revenue - the flights that can't operate and the passengers that end up not travelling. The second cost is the cost for the crews and the airplanes out of position and getting them back to where they should be. And then there are the costs for things like the de-icing fluid and other materials that the airlines need to keep the planes safe for flying." The bill is adding up though. The latest incident not included, Cowen and Co. estimates earlier weather impact could cost the industry up to $100 million in the first quarter. And analysts are eager to hear what JetBlue will say when it releases results on January 29th. It delayed or canceled 800 flights between Tuesday and Wednesday and that's after deciding to shut down major operations earlier this month due to frigid temperatures. But Harteveldt believes so far the overall fallout on the industry should be minimal. SOUNDBITE: HENRY HARTEVELDT, TRAVEL INDUSTRY ANALYST, HUDSON CROSSING (ENGLISH) SAYING: "It certainly is inconvenient for anyone who's been affected. It's no fun seeing your flight delayed and then canceled and then possibly spending the night at an airport but in terms of the airline business, I think this is manageable and I don't expect any material impact to earnings or revenues." If results from Delta are any indication, air carriers flew into the New Year with the wind at their back. Demand was up in the fourth quarter and so were ticket prices, while at the same time fuel costs were comparatively lower, and merger-mania led to fewer planes and higher profits. Profits airlines can count on in the current quarter - as long as Mother Nature's temper doesn't get much worse.