January Storms Cost Airlines Up to $150 Million

Monday, 03 Feb 2014 06:37 PM

 

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Severe winter storms in the first month of the year cost airlines as much as $150 million in lost revenue and extra expenses after they canceled about as many flights as in the past three Januaries combined, industry data tracker masFlight said.

More than 49,000 flights were scrapped and another 300,000 delayed, Bethesda, Md.-based masFlight estimated. Carriers lost $75 million to $150 million because of costs such as deicing jets as well as lost revenue, said masFlight CEO Josh Marks.

"It's a little more severe because it was concentrated in the Northeast, where we have some of our busiest airports in the country," said David Swierenga, president of aviation consultant AeroEcon in Round Rock, Tx.

Cancellations continued into February, with more than 1,800 flights grounded as of 3:30 p.m. EST Monday, according to Houston-based data provider FlightAware. Snow slowed travel at New York City's three major airports, with delays of as long as three hours, the Federal Aviation Administration said.

"Given how we are heading into February and the weather patterns we're in, we shouldn't expect February to be a whole lot better," Marks said.

January's disruptions inconvenienced about 30 million passengers and cost them more than $2.5 billion in expenses such as hotel rooms and meals, masFlight estimated.

The first month of the year included four of the 10 coldest days during the 21st century in the contiguous 48 states and record snowfall across the country. Chicago was at one point colder than the South Pole, and an ice storm stranded thousands of drivers on Atlanta-area highways.

JetBlue Airways, based in New York, was one of the most affected airlines, canceling 1,800 flights over a five-day period at the beginning of the year.

Regional airlines took the brunt of the cancellations, accounting for 67 percent of the total, or 32,000 flights, according to masFlight. The groundings topped those during Superstorm Sandy in October and November 2012, and back-to-back storms in February 2010.

Regulatory changes helped inflate flight-cancellation rates, masFlight said.

Beginning in 2010, the Department of Transportation imposed fines of as much as $27,500 for every instance in which an airline held passengers on board on the ground, without opportunity to deplane, for more than three hours for a domestic flight, or four hours for an international leg.

As a result, airlines began returning to the gate before the deadline, tying up gates and leading to cancellations for returning flights, masFlight said.

New federal rules governing pilots' work hours that took effect Jan. 4 also led to more scrapped flights as last month's weather delays mounted, masFlight's Marks said.

"What we saw this month was the compound impact of really severe weather, as extreme a winter as we've seen in four years, combined with the impact of new regulations," Marks said.




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