The cost of staying grounded

Alisa Roth Mar 16, 2007

KAI RYSSDAL: The first day of Spring is just around the corner. About another week or so. But airlines from United and Delta to American and Jet Blue cancelled hundreds of flights today because of ugly weather forecasts in the Northeast. Prudent, perhaps. And probably the best for passengers. But Marketplace’s Alisa Roth reports from New York it might not have been the wisest economic decision.

ALISA ROTH: It’s been precipitating all day here in the Big Apple. A little snow, a little rain, some hail. Enough to dig out the boots. But is it doesn’t seem like enough to cancel hundreds of flights. Have airlines gotten chicken?

AARON GELMAN: Well, a lot of the time it depends on how much they value bad publicity. Or these, you know, the negative value of being, the butt of jokes on David Letterman.

You’ll remember Jet Blue under-estimated a big snowstorm and got stuck with stranded passengers, crews that couldn’t get to work and full planes that couldn’t take off.

GELMAN: Airlines generally tend to opt on the basis of judgements that say let’s not get ourselves in jeopardy this way, so we’ll cancel early.

In any case, the decision is always a gamble.

Transportation consultant George Hamlin says it’s hard to know whether cancelling flights is actually cheaper than the alternatives.

GEORGE HAMLIN: The real problem is you’re not getting the revenue for that and as I said before, most of the expenses continue. So it is a considerable sum. It’s not as if the airline reaps a financial bonanza by cancelling the flights.

And what about the companies that decide to fly anyway? Hamlin says these days, there’s not much room on most flights to accommodate spillover.

In New York, I’m Alisa Roth for Marketplace.

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