What is the projected impact of hurricane Irma on U.S. Airlines?
As the second hurricane approaches, airlines are put into a frenzy. Major U.S. companies such as Delta and American Airlines have already begun shutting down operations. Shutting down of these airlines has immediate economic impact. Miami is home of one of the largest American Airlines bases (12th busiest base in America) and obviously a key money-maker for the city. They also have had to cancel flights coming back from Europe, South America, and the Caribbean. I would expect American Airlines stock to decrease gradually and expect northern-based U.S. airlines to gain from it. However, Delta (who is spread out throughout the U.S.), is going to take a blow. Their main location, Atlanta (the busiest airport in the world), is in the path of Irma. The category four hurricane will not only impact the airports; it will be impacting foreign business in the south. Traveling from the south to overseas clients (or vice versa) has become very difficult. The United States will be without significant income sources for several weeks. Although airlines only contribute roughly 5% to the U.S. GDP, I expect the nation's GDP to be negatively effected in upcoming months. I expect this because our airlines bring great business to our nation (and also to our countries).
http://money.cnn.com/2017/09/06/news/hurrican-irma-florida-airlines-prepare/index.html?iid=SF_LN
https://www.faa.gov/air_traffic/publications/media/2016-economic-impact-report_FINAL.pdf
Nick,
ReplyDeleteBeing a frequent flyer myself, I agree that this hurricane will negatively impact our economy. Not only will it hurt business travel like you mentioned, but it will also impact tourism as well. Both Miami and Atlanta are popular tourist destinations. Without a way for travels to get to the city, I suspect that both Atlanta's and Miami's incomes will decrease regardless of the damage done by the hurricane. This is due to the cancellation of flights, and the fact that tourists will probably be more hesitant to visit these cities even after Irma has passed.
I agree that the hurricanes will impact the airline companies which will then in turn have an impact on the overall economy. The airline industry is heavily dependent on their consumers. With the hurricanes negatively impacting people’s lives financially, there is expected to be a decrease in personnel wanting/needing to fly post hurricane. People who were affected by these hurricanes are going to need to put most of their savings into rebuilding their lives and communities. We talked about Rising gas prices which are also expected to dramatically impact the airlines. Gas prices are rising due to the increased demand for gas so that people may evacuated.
ReplyDeleteThis hurricane will definitely take a toll on all airlines involved in the southeastern United States. Especially American and Delta as you have mentioned. However, I don't necessarily agree that the hurricane will be of help to U.S Airlines. Just because U.S is predominantly based in the North, does not mean they will be untouched by the hurricane as they still have business in the southeast. I believe they will see a loss of revenue as well. However, as you said, they will not be impacted nearly as much as some of the other airlines that have more business in the region.
ReplyDeleteSeveral major airlines will take a large hit from both hurricanes hitting the South. This will not only create a problem for commercial airlines, but also delivery services. The Fedex delivery headquarters are located at the Memphis airport, which is also in the path of Hurricane Irma. As stated in the post airline are about 5% of GDP, but airline travel and delivery affect so many other aspects of American business, so in my opinion a larger portion of GDP will be hit.
ReplyDeleteMany people are concerned that the high winds will cause destruction to airports. If airport runways or the buildings are damaged there will be more complications and delays. By canceling fights, airports are taking a major loss. Because individuals are unable to travel to certain airports and destinations it will cause further complications in the economy. Making it difficult for people to travel for business and jobs.
ReplyDeleteI totally agree. Although I also think that there will be more of an impact to short route flights for example, flying out of Atlanta to MIA. I am working on my last commercial pilot license right now and weather is very important. However, the pilot would be able to divert long route flights to and from Europe or to South America but that would also mean many flights will be delayed/cancelled.
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