Transport Airlines

United Airlines says Sandy cost it $90 million in revenue, but it could have been worse

Nov 08, 2012 9:01 am

Skift Take

Although the storm initially cancelled over 5,000 flights, United will eventually receive fares for rebookings, saved costs on fuel and labor, and improved load efficiency on flights following the storm.

— Samantha Shankman

Latest Report: Instagram Strategies for Travel Brands

Rachel Titiriga  / Flickr.com

An United Airlines flight takes off in Chicago. Rachel Titiriga / Flickr.com


United Airlines said Superstorm Sandy cut its October revenue by about $90 million as it was forced to cancel almost 5,300 flights.

That’s nearly an entire day’s worth of United’s schedule lost. It runs about 5,500 flights a day throughout the world, including those operated by its regional partners. United’s scrapped flights accounted for about a quarter of total the industry’s Sandy-related cancellations.

United, the world’s largest airline, said late Wednesday that the storm that came aground in the New York area 10 days ago shaved about $35 million off its profit in October. Delays and cancellations in the New York region tend to ripple throughout the world because it’s a major international connection point and is one of the busiest airspaces in the country.

United’s traffic in October fell 3.3 percent.

But the hurricane-winter storm hybrid boosted its per-passenger revenue by about 1 percent. That’s because some stranded travelers were stuffed onto other flights, allowing the airline to improve efficiency.

Delta Air Lines Inc. said last week that Sandy cut its October revenue by $45 million and profit by $20 million.

Both airlines are likely to report the impact of Sandy for the month of November. They are expected to release November figures early next month. Added to that, the winter storm that blanketed the New York area on Wednesday, little more than a week after Sandy, will also hurt profit and revenue.

United Airlines suspended operations at New York’s three main airports Wednesday afternoon.

The impact of cancellations, though, might not end up being as damaging as one might think. Besides the improved efficiency of putting more customers on other flights, most passengers eventually reschedule, so the airline still collects the fare. And the airline doesn’t have to pay the crew or the cost of burning fuel on the flights it cancelled.

United parent United Continental Holdings Inc. is based in Chicago.

Its shares slipped 14 cents to $20.39 in morning trading Thursday. Its shares have traded in a 52-week range of $15.51 to $25.84.

Tags: , , ,

Next Up

More on Skift

American Express to Vote in Favor of Concur-SAP Merger
Concur and SAP Emails to Employees Cover the Future in an SAP Context
3 Hospitality Trends We’re Tracking At Skift This Week
Business Travelers Find Turning Trips Into Vacations Has Its Perks