After tropical storm Irene hit the East coast, major airline companies were forced to cancel approximately 9500 flight, completely halting operations at the busiest airports in the U.S. including the New York Airport . However, airline companies are seeking to reschedule flights as the hurricane is expected to exit the region by Monday.
Consequently, carriers like United and Continental Airlines, subsidiaries of United Continental Holdings, Inc. (UAL) announced their plan of resuming flights at Newark Liberty International Airport, John F. Kennedy International Airport and LaGuardia Airport on Monday, August 29.
Other airlines that conduct regular flights from these airports are Delta Air Lines (DAL), US Airways (LCC), and American Airlines (AMR) and JetBlue Airways (JBLU).
The catastrophic Irene created a huge dent in the airline industry, which is already struggling with mounting cost and fuel prices. The affected region, particularly the Northeast accounted for highest air traffic for the airlines, serving major airports like John F. Kennedy and LaGuardia airports, New York and Newark airport, New Jersey. Cancellation of several flights to these destinations led to tremendous discord in other connecting regions, resulting in huge business losses. Market sources project a loss of more than 1 billion for the airline industry as a result of shut down during the last weekend.
To combat losses, airlines like JetBlue have introduced reduced fares for customers rescheduling their travel date to affected areas.
Airlines industry remains highly dependant on weather conditions and historically suffered huge losses during the winters due to massive snowstorms. The cyclonic storms in December and February led to cancellations of over 10, 000 flight. Given these unavoidable circumstances, we believe the airline industry will continue to face operational challenges and struggle to manage rising costs. However, given the fair hikes in light of surging fuel prices and capacity cuts to accommodate full capacity will remain a crucial factor underpinning operational efficiency for this industry.
Currently, we have long-term Neutral recommendations on Delta Airlines, United Continental Holdings, Southwest Airlines and JetBlue.
AMR CORP (AMR): Free Stock Analysis Report
DELTA AIR LINES (DAL): Free Stock Analysis Report
JETBLUE AIRWAYS (JBLU): Free Stock Analysis Report
US AIRWAYS GRP (LCC): Free Stock Analysis Report
UNITED CONT HLD (UAL): Free Stock Analysis Report
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