Friday, December 19, 2014

Airlines tally up their snowstorm losses

It took a convoy of snowplows to clear the runways at PHL on Feb. 10, at the end of the second major February snowstorm.
It took a convoy of snowplows to clear the runways at PHL on Feb. 10, at the end of the second major February snowstorm. MICHAEL BRYANT / Staff Photographer
It took a convoy of snowplows to clear the runways at PHL on Feb. 10, at the end of the second major February snowstorm. Gallery: Airlines tally up their snowstorm losses

You knew February's snowstorms were tough - 51.5 inches fell at Philadelphia International Airport during the month.

Airlines began putting a tab on the damage this week.

US Airways Group Inc. said yesterday that it lost $30 million in passenger revenue because of weather-related cancellations in February.

Continental Airlines Inc. said Monday that the storms, Feb. 10 and 26, forced it to curtail operations at its Newark, N.J., hub, costing $25 million in lost revenue.

Most airlines do not report monthly revenue, but will wait until they deliver first-quarter financial results in April.

US Airways, with more East Coast departures than any other airline, said its flight operations were suspended for three days at Reagan National airport in Washington, two days at Philadelphia International, and one day at New York's LaGuardia last month.

US Airways said its cancellation rate was 7.1 percent in February, the highest of any month since the 2005 merger of US Airways and America West.

The Tempe, Ariz., carrier said "mainline" passenger traffic, measured in revenue passenger miles, fell 4.7 percent in February from a year earlier, while capacity - seats and flights - fell 5.3 percent. A revenue passenger mile is equal to one passenger flown one mile.

But US Airways said passenger revenue per available seat mile, an important measure, was up about 8 percent in February for its mainline and express or regional jet operations.

Continental said its passenger revenue per available seat mile also rose about 8 percent.

US Airways said load factor - how full planes were - rose slightly to 77.6 percent, from 77.2 percent in February last year.

"The revenue environment continues to show material signs of improvement with corporate booked revenue up more than 35 percent on a year-over-year basis," US Airways president Scott Kirby said.

Jesup & Lamont Securities analyst Helane Becker yesterday downgraded US Airways to "hold" from "buy," saying the share price had moved past her $7 price target for the year. Because of the $30 million revenue loss due to storms, Becker said she had lowered her first-quarter estimate to a loss of 53 cents from a prior loss of 34 cents, and reduced her full-year earnings estimate to 51 cents, down from 70 cents.

"This is certainly a onetime event, but we are lowering our full-year estimate," Becker said in a note to clients, "and as a result, our $7 price target would go to $5.10, which prompts the downgrade."

Jesup & Lamont also cut its first-quarter earnings estimate on Continental Airlines to 6 cents a share from 19 cents, after the Houston carrier disclosed that storms had cost $25 million in lost passenger revenue.

Continental's seat capacity fell 3.8 percent in February, from a year earlier. "The majority of that is attributed to the two snowstorms," said spokeswoman Julie King. "On Feb. 10, we suspended service completely at the Newark hub because of the snow. On Feb. 26, the majority of our flights were canceled. We still operated some international flights."

AirTran Airways yesterday posted increases in February traffic, capacity, enplaned passengers, and load factor, but it did not discuss the effect on revenue of snowstorms.

American Airlines reported February traffic declined 2.2 percent, and seat capacity as down 4.2 percent, from February last year. With reduced flying, planes were slightly fuller, and the load factor was up 1.5 percent.


Contact staff writer Linda Loyd at 215-854-2831 or lloyd@phillynews.com.

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