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What’s the snowstorm costing airlines?

Marketplace Staff Feb 11, 2010

What’s the snowstorm costing airlines?

Marketplace Staff Feb 11, 2010


Kai Ryssdal: While the Vancouver Olympic committee has had to resort to trucking in snow to cover its ski and snowboard courses, most of the Eastern seaboard of these United States has more snow on the ground than it knows what to do with. Also on the ground over the past couple of days have been thousands of airplanes and passengers who couldn’t get where they’re going. That includes one Scott McCartney, who happens to write the Middle Seat column for the Wall Street Journal. We have dialed him up to talk about the lingering economic effects of an unusually large snow storm, to quote “The Daily Show.” Scott, good to talk to you again.

Jeff McCartney: Good to be back with you.

Ryssdal: This is almost too funny, but you’re actually stuck in Boston now, aren’t you?

McCartney: I am. I came up here for a snow story and of course got stuck.

Ryssdal: All right, well other than the Journal having to spend some more money on hotel rooms for you, do we have any way to estimate how many people out there — how many flights got stuck and people are trapped?

McCartney: Well we can count flights and we can extrapolate from that. So far over the past week there have been about 20,000 flights in the U.S. that have been canceled. It’s a staggering number, a fairly large percent of flights. If you figure, you know, an average flight may have 100 passengers on it, then you’re looking at somewhere around 2 million people who have been affected by this. And look at some average fare data, and you can make a back-of-the-napkin guess that there’s about $200-million worth of airline revenue that’s been affected by the storm, and airlines typically may lose about half of that.

Ryssdal: And that’s not counting meetings that didn’t happen, deals that didn’t get done, all of that.

McCartney: Yeah, all of that. For hotels, some of them may end up empty because people didn’t show up. Some of them may end up full because people like me are stuck longer. But it affects restaurants, it affects anybody who has anything to do with travel.

Ryssdal: I imagine this would only be marginal at best, but can the airlines mitigate any of these lost revenues by not having to buy gas and use the airplanes and other expenses?

McCartney: Yeah, that’s exactly right. They do mitigate some of it. And a lot of the revenue they do hang onto because people are going to fly later if they got delayed. Or in some cases they’re going to take their nonrefundable ticket and apply it to a different trip. But in storm situations, when you do ground that many flights, you do save quite a bit on your gas bill. You don’t pay landing fees for those 20,000 flights that have been canceled. You probably end up paying your crews for canceled flights. There is some savings for airlines in costs, but at the end of the day, it’s still very costly for them.

Ryssdal: You know, Scott, I couldn’t help but think during this whole mess of the JetBlue episode over the past couple of years — and also other airlines — where they got stuck because of a storm out on the tarmac 8, 10, 12 hours, whatever it was, all kinds of negative publicity. Was that a factor, do you think, in the airlines who are saying, the heck with it, we’re not even going to try.

McCartney: You know I think it was a factor. I think in general airlines operations have grown more cautious. And not just because of the JetBlue episode, the American episode. Delta’s had it. They’ve all had their different experiences. Continental Express last summer in Rochester, Minn., a plane stuck over night because of a weather situation. So they’ve gotten more cautious about trying to fly in bad weather. Not from a safety perspective, but just from the standpoint of that plane could get diverted somewhere, we could have a problem, we could end up with people stranded. And the government’s gotten involved in stranding issues and I think in general airlines just say the prudent thing to do is not try.

Ryssdal: All right. Now, to you, when are you going to get home?

McCartney: Tomorrow, I hope. Went to the airport, stood in line. I couldn’t get a seat today, so I have a seat for tomorrow and let’s hope it goes.

Ryssdal: You see everybody, even the travel editor at the Wall Street Journal has some problems. Scott McCartney, thanks a lot.

McCartney: Good to be with you.

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