* Delta's October revenue, profit hurt by cancellations
* JetBlue expects "material" impact as demand softens
* US Airways, United, American load extra fuel as precaution
Nov 2 Delta Air Lines and JetBlue
Airways on Friday said flight cancellations as a result
of superstorm Sandy will hurt their fourth-quarter results,
denting both revenues and earnings.
Other airlines said they were loading their planes with
extra fuel because of concerns over fuel shortages and supply
chain operations in the New York area due to the storm.
JetBlue, which is based in New York and operates a terminal
at John F. Kennedy International Airport, said it expects weaker
short-term flight demand as customers look to rebuild after the
storm. Effects from Sandy are expected to be "material" in the
fourth quarter, it said in a statement.
JetBlue said it canceled 1,484 flights in October and 230 in
November because of Sandy. The storm slammed into the New York
and New Jersey region on Sunday and Monday, shuttering all three
major New York-area airports through Tuesday; service started to
resume on Wednesday.
Delta canceled more than 3,500 flights because of the storm.
It said Sandy hurt October revenue by $45 million and likely
shaved about $20 million from its October profit. The effect on
November revenue and profit is expected to less than that seen
in October, it said.
Sandy caused the cancellation of more than 20,000 flights,
according to FlightAware.com. The closures in the New York area
had a trickle-down effect as airlines were forced to cut flights
in other major cities.
US Airways, AMR Corp's American and United
Continental said on Friday they had loaded planes with
extra fuel as a precaution. Power outages caused by the storm
have shuttered some oil refineries.
"Even though there are adequate fuel supplies per the Port
Authority, we are exercising caution given fuel shortages in the
region," US Airways spokeswoman Michelle Mohr said in an e-mail.
"It's just another prudent step to ensure that we don't
experience any fuel-related disruptions."
United spokesman Charles Hobart said carrying extra fuel was
not unusual in the event of travel disruptions. "We will
continue to assess the situation in New York and adjust our fuel
loads to meet our needs," he added.
ANALYST SEES PROFIT HIT IN FOURTH QUARTER
Among U.S. carriers, JetBlue and US Airways, which
has a hub in Philadelphia, likely have the most relative
exposure to financial effects from Sandy, Barclays analyst David
Fintzen said in note to clients on Thursday.
While Delta and United Continental have major hubs in
greater New York, their diversified networks will help limit
financial impact, Fintzen said.
He said airline profits as a whole could suffer by $200
million in the fourth quarter because of the storm. He is
projecting a collective pretax profit of $450 million for major
airlines excluding American, which is operating under Chapter 11
"We think U.S. airlines overall can still be profitable in
an off-peak quarter after accounting for the hurricane," Fintzen
Delta, based in Atlanta, said corporate travel and the Sandy
cancellations aided a key revenue metric in October. Its unit
revenue, or passenger revenue per available seat mile, rose 5.5
percent in October from a year earlier.
The improvement in unit revenue, also known as passenger
revenue per available seat mile, was about one percentage point
higher than it would have been without the impact of the
hurricane, Delta said. Cancellations tend to help unit revenue
as more travelers are put on remaining flights. The percentage
of seats filled systemwide at Delta in October was 84.6 percent,
up from 82.8 percent a year earlier.
Shares of Delta closed flat at $9.70 on Friday. Other
airline stocks were mixed, with United Continental up 1.3
percent at $19.73, US Airways down 0.2 percent at $12.53 and
Southwest Airlines down 0.2 percent to $9.03. JetBlue
closed down 0.4 percent at $5.33.