Canceled Flights at 10-Year High Amid Blizzard-to-Irene Upheaval

U.S. airlines are canceling flights at the fastest clip in a decade as storms from blizzards to hurricanes wallop the busiest hubs, and full planes are making it harder for stranded travelers to rebook trips.

United Continental Holdings Inc. (UAL), Delta Air Lines Inc. (DAL) and other large carriers have scrubbed almost 104,000 flights this year through Sept. 21, or 2.36 percent of the scheduled total. A full-year rate at that level would be the highest since 2001, according to the U.S. Bureau of Transportation Statistics.

The disruptions stem from a combination of foul weather in major markets such as New York and seating-capacity cutbacks to curb costs. When Hurricane Irene struck the East Coast in August, Cameron C. McCulloch faced a weeklong wait for a new ticket -- so he drove the 3,000 miles from Seattle to Yale University to catch the start of classes.

“There was too much uncertainty with the flights,” said McCulloch, 21, a Yale junior. “At least with driving I knew I’d be there on time and that I could control all the factors.”

Annual cancellations have exceeded 2 percent just six times in 24 years of federal recordkeeping. Researcher FlightStats.com computed the 2011 year-to-date figure for Bloomberg, using data reported by airlines. BTS won’t disclose its September figures until November.

‘Getting Smarter’

Airlines are “canceling sooner and getting smarter about doing it,” said Michael Derchin, an analyst at CRT Capital Group LLC in Stamford, Connecticut. “They save money when they pre-plan and recover more quickly afterwards.”

By moving jets out of a storm’s path, carriers are able to start rebuilding normal operations more quickly once conditions improve, and they don’t have to spend as much on crew pay and overnight emergency accommodations, or on fuel.

U.S. airlines are now 24 percent more likely to cancel flights after the so-called three-hour tarmac rule that was imposed in April 2010, according to a Sept. 14 study by the Government Accountability Office.

The rule provides for fines against carriers that keep fliers on planes for more than three hours after leaving the gate without offering them a chance to get off. Political support for the regulation grew after the Feb. 14, 2007, storm that marooned 130,000 JetBlue Airways Corp. (JBLU) passengers in terminals and on planes at New York’s Kennedy airport.

The severity and location of storms this year helped balloon cancellation rates.

Snow, Ice, Irene

A February blizzard hobbled United and American Airlines in Chicago and then dropped a record blanket on New York, home to the busiest U.S. airspace. Ice storms belted Delta’s Atlanta hub in January and American’s hometown Dallas-Fort Worth hub before Super Bowl weekend the next month.

Hurricane Irene’s path took it across Washington, Philadelphia, New York and Boston at the end of August. Adding cancellations from that storm to others in August and September, U.S. airlines scrubbed more than 16,200 flights in the two-month period, according to Portland, Oregon-based FlightStats.com.

Among them was the Aug. 27 trip that Yale student McCulloch planned on Alaska Airlines from Seattle to Newark, New Jersey.

He borrowed his parents’ Subaru Forester sport-utility vehicle for the 4,827-kilometer (3,000-mile) drive rather than wait to be rebooked. His younger brother flew in from Seattle a few days ago to ferry the auto back to their parents.

“I didn’t want to start the semester behind from the get- go,” McCulloch said. “I couldn’t count on flying.”

Seating Cutback

Seats already were in shorter supply this year. The industry has cut 15 percent of its capacity since 2008 when demand plummeted during the recession, making it tougher to find open seats to rebook passengers on new flights.

Planes flew 85.5 percent full in June, the most-recent data available and a near-record for that month, according to BTS. By comparison, planes were 74 percent full in June 1996 when airlines were adding capacity.

Airlines said they were able to rebook most Irene-grounded passengers within a few days by adding extra flights and scheduling those fliers on Tuesday and Wednesday, which are slower travel days. They also allowed passengers to change their itineraries to dodge the storm or reroute through airports that weren’t in Irene’s way, spokesmen said.

“I don’t think the airline industry opened itself up to criticism on this one,” said Jay Sorensen, a consultant with IdeaWorks in Shorewood, Wisconsin, who was previously marketing director at Midwest Airlines. “They knew the storm was coming, and they prepared and responded as best they could.”

‘Very Dynamic’

When Alaska Airlines started canceling flights for Irene, it initially appeared that some rebookings would take a week, said Paul McElroy, a spokesman for the Seattle-based carrier. That delay shrank as passengers canceled trips and the airline added more flights, allowing it to re-accommodate all New York- and Boston-bound travelers within three days, he said.

“Situations like that can be very dynamic and deceiving at first,” McElroy said. “That’s why we always tell passengers to keep checking the website or calling.”

Callie Crisp, who works in advertising for children’s books at Harper Collins in New York, got home after Irene by taking a JetBlue flight from Tampa, Florida, instead of Orlando, where she originally was scheduled to depart after a weekend visiting her family. She made it out on a Monday night, one day late, instead of waiting for a Thursday return from Orlando, she said.

“I would have missed so much work,” said Crisp, 25.

While the weather has trashed travelers’ itineraries and sapped airline sales, CRT Capital’s Derchin said the storms haven’t been severe enough to prompt adjustment of his financial models for the industry.

‘Fluky Year’

United, which operates a hub at Newark, said Irene reduced August revenue by $40 million, the most of any U.S. carrier. Delta said its biggest upheaval this year was the January ice storm, which caused 4,600 cancellations over three days. Revenue was cut $40 million by that and other storms in the same month, offset by $10 million in expense savings, Delta said at the time. That was twice the effect Delta estimated for Irene.

“It’s been a very fluky year, weather-wise,” Derchin said. “Irene going up the East Coast the way it did was one of those 100-year type events that happened to track in an extremely populated part of the country.”

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net.

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