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Hurricane Katrina

Storm aftermath still disrupting airline industry

Flights into the affected area are canceled, and airlines are bracing for possible fuel shortages.

Associated Press
Published September 1, 2005



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ATLANTA - Some major carriers have canceled flights to the New Orleans and Gulfport, Miss., airports - popular destinations for tourists, convention participants and gamblers - until at least next week, increasing financial pressure for the airlines as they also deal with potential fuel shortages.

Daily jet fuel production nationwide has been cut 13 percent because of damage from the hurricane to Gulf Coast refineries, according to Jack Evans of the Air Transport Association.

"What it means is there is less fuel, essentially," Evans said Wednesday. "Carriers are having to take measures to conserve fuel at airports where they are low and tanker in fuel when serving some destinations on the East Coast."

Atlanta-based Delta Air Lines Inc., the nation's third-largest carrier, has canceled all flights into and out of the New Orleans and Gulfport airports through Monday, spokeswoman Chris Kelly said. As for fuel, Delta is working with suppliers to make sure contingency plans are in place to deal with any potential shortages, Kelly said.

AMR Corp. unit American Airlines, the nation's biggest carrier, canceled 34 flights in and out of New Orleans on Wednesday. Spokesman Tim Smith said the carrier, based in Fort Worth, Texas, doesn't expect to resume scheduled flights there until at least Tuesday. Houston-based Continental Airlines Inc. and its Continental Express commuter service canceled 40 flights Wednesday and a similar number for today in and out of New Orleans and Gulfport, Miss., said spokeswoman Julie King.

King said Continental was not having trouble finding fuel and could carry extra fuel aboard planes if shortages develop.

No. 2 U.S. carrier United Airlines, a unit of UAL Corp. of Elk Grove Village, Ill., which was still updating flight cancellation numbers Wednesday, does not expect a significant financial impact, spokeswoman Jean Medina said. United does not serve Gulfport.

Asked about potential fuel shortages, Medina said, "We are assessing the situation, and working closely with our suppliers."

Northwest Airlines Corp. of Eagan, Minn., has suspended service into New Orleans and Gulfport. Spokesman Kurt Ebenhoch did not say when service to those airports would resume. He said flights to Las Vegas, Orlando, Tampa and Fort Myers were carrying enough fuel for the round trip rather than depending on refueling in those cities, as a precaution against shortages.

US Airways Group Inc. of Arlington, Va., has canceled service to and from New Orleans until at least Sept. 7. US Airways does not serve the Gulfport airport.

Discount carrier AirTran Airways has closed its 18 daily flights to and from the two airports through at least Saturday. The canceled flights represent about 3 percent of AirTran's 564 daily flights. Spokesman Tad Hutcheson said the airline has a seven-day supply of fuel on hand at its Atlanta hub and doesn't expect any shortages.

The New Orleans airport, meanwhile, has reopened to allow humanitarian flights in and out during daylight hours, but officials are unsure when commercial service will resume there. The uncertainty has raised questions about the financial impact on the airlines that serve the airport. One runway is usable but getting to the airport is difficult, officials said.

Officials said the New Orleans airport has no significant airfield damage and had no standing water in aircraft movement areas. The airport did sustain damage to its roofs, hangars and fencing.

At the Gulfport airport, which is served by five airlines, there was damage to the control tower and to AirTran's gate area, Hutcheson said.

The flight cancellations and fuel problems come at a time when the major airlines, especially Delta, are already reeling.

"I think all of the airlines will feel this," said airline expert Terry Trippler, who runs a travel Web site cheapseats.com.

"It's a little more than a blip, but New Orleans and Gulfport alone is not going to put Delta into bankruptcy. I think $70 a barrel oil is the straw that would break the camel's back."

Crude oil prices fell 87 cents Wednesday to close at $68.94 on the New York Mercantile Exchange, after briefly trading as high as $70.65.

Delta shares fell 3 cents, or 2.5 percent, to $1.17 in afternoon trading on the New York Stock Exchange. AMR shares fell 20 cents, or 1.6 percent, to $12.49 on the NYSE, where Continental shares fell 22 cents, or 1.7 percent, to $13.03. AirTran shares fell 7 cents to $10.13 on the NYSE.

[Last modified September 1, 2005, 00:57:17]


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