Gustav depletes airlines’ Labor Day business - East Valley Tribune: Business

Gustav depletes airlines’ Labor Day business

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Posted: Monday, September 1, 2008 6:29 pm | Updated: 10:31 pm, Fri Oct 7, 2011.

ATLANTA - By disrupting travel to and from the Gulf Coast, Hurricane Gustav denied the airline industry some critical revenue over the Labor Day holiday weekend.

Gustav was also expected to nick tourism, insurers and utilities. Although quantifying losses in these sectors — and the region’s energy infrastructure — will be difficult until the storm that made U.S. landfall Monday blows over, early indications suggest the impact wasn’t nearly as bad as after Hurricane Katrina, which struck three years ago.

Some Gulf Coast retailers and construction companies are even likely to see a moderate boost in business.

“After a hurricane, when government aid flows dramatically, it tends to have actually a positive impact on economic growth, because now we’re spending huge amounts of money to rebuild, shore up, in ways that never would have been spent had we not had a hurricane,” said Joel Naroff, president of Naroff Economic Advisors in Holland, Pa.

Some observers were breathing a sigh of relief that the storm weakened as it came ashore in south Louisiana, avoiding a direct hit on flood-prone New Orleans and boosting hope that the city would avoid catastrophic flooding.

But the weather was severe enough to force the cancellation Monday of more than 135 flights to and from airports in Louisiana, Mississippi and Alabama.

“It will be a big hit to the airlines for September,” said AirTran Airways spokesman Tad Hutcheson. “It’s usually a tough month. The only bright spot is the Labor Day weekend. Those pretty much were full flights we’ve had to cancel.”

AirTran canceled 23 flights Monday due to the storm, while Delta Air Lines canceled 21, Continental Airlines canceled 28 and Southwest Airlines canceled 65. Some airlines were hoping to resume service to Gulfport-Biloxi International Airport today, though it was unclear when flights would be able to resume to Louis Armstrong New Orleans International Airport.

Airlines were issuing refunds or rescheduling affected passengers on other flights. Many were waiving fees for customers who made flight changes due to the storm.

Robert Hartwig, president and economist at the Insurance Information Institute, said insurance payouts will likely not be nearly as high as those suffered from Hurricanes Katrina or Rita in 2005.

The region likely mitigated damage by enacting stricter building codes, tightening down roofs and elevating structures based on lessons from Katrina.

“Louisiana and much of the Gulf Coast has spent the last three years hardening its defenses for the next hurricane,” he said.

Hartwig added that the reduced population of New Orleans and the surrounding areas would also probably limit insurance payouts, which totaled $41 billion from privately insured losses on 1.7 million claims from Katrina.

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