Delta, US Airways Say Hurricane Irene Eroded Profits in August
Delta Air Lines Inc. (DAL) said flight cancellations from Hurricane Irene reduced August net profit by $15 million, joining US Airways Group Inc. (LCC) in kicking off the airline industry’s tally of costs from the storm.
Irene cut operating income at US Airways by as much as $10 million, the Tempe, Arizona-based airline said in a U.S. regulatory filing earlier today. Delta grounded more than 2,200 flights while US Airways scuttled about a quarter of its 9,100 scheduled departures from Aug. 27 through Aug. 29.
Other airlines may detail the financial drag from the hurricane tomorrow at a Dahlman Rose & Co. transportation conference in New York. Irene grounded more than 11,200 flights as it traveled up the East Coast last month, and the industry total may reach as much as $300 million pretax, Michael Linenberg, a Deutsche Bank AG analyst, said in a Sept. 2 report.
“With the exception of the New York airports, this storm was not as bad as a typical big blizzard,” Robert McAdoo, an Avondale Partners LLC analyst, said in an interview today. “Once the storm passes, there’s no snow to scoop, no planes to deice. It goes back to normal pretty quickly.”
August passenger traffic at Delta and its regional carriers fell 0.3 percent from a year earlier, the Atlanta-based carrier said today. US Airways’ traffic on the same basis rose 1.1 percent, while unit revenue increased 9 percent.
Delta fell 14 cents, or 1.9 percent, to $7.13 at 4 p.m. in New York Stock Exchange composite trading. US Airways dropped 18 cents, or 3.5 percent, to $5.04, leading declines by all 10 carriers in the Bloomberg U.S. Airlines Index.
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