Weather and Economy

Weather affects the economy in many ways; death of

crops and livestock account for significant economic
losses. Patrons of restaurants and retail stores stay in at
home instead of patronizing these businesses. The
most daunting, both personally and economically,
problem of bad weather takes place at airports.
In 2010 the Federal Aviation Administration
commissioned a study--led by researchers at the
University of California, Berkeley-- on the economic impact of flight delays. The comprehensive
study analyzed the impact on airlines, passengers, the cost of lost demand, and the collective
impact of these costs on the U.S. economy in 2007. Although there are many reasons flights
may be delayed or cancelled, weather can be the most common and impacting. For example, in
February 2014 Super Bowl XLVIII was held at the MetLife Stadium at the Meadowlands Sport
Complex in East Rutherford, New Jersey. The game was the first open-air cold-weather climate
Super Bowl ever played. However, the game was played in comfortable conditions; 50 degrees
Fahrenheit at kickoff. The next 12 hours, however, would produce a crippling snowstorm. In the
New Jersey-New York-Philadelphia market alone 4,500 flights were canceled and another 6,600
were delayed in the four day preceding the Super Bowl.
Another example, during the polar vortex of January 2014, 49,000 flights were canceled
and another 300,000 were delayed. masFlight, an aviation operations technology company,
estimated that a cancelled flight can cost $40,000 bit on average $6,000 per flight. The cost use
to be higher but fuel offsets have helped overcome the cost.
In another report, masFlight analyzed the effects of winter weather between December
2013 and March 2014. During this time frame 126, 438 flights were canceled. The average for
these same months between 2009 and 2013 was 68, 182. The number of flights delayed during
the 2014 winter was 1,186, 679, which in previous years averaged 1,039,761. This resulted in a
$5.3 billion (compared to a $3.3 billion average loss in previous years) in lost passenger activity,
$500 million in higher operating costs, and $4.5 million and less revenue for airports.
The FAA commissioned report was more inclusive to include the amount passengers lost and
not just the airlines. This amount was $16.7 billion.
Direct cost of air transportation delay in 2007
Cost Component
Costs to Airlines

Cost
(in billions)
$8.3

Costs to Passengers
Costs from Lost Demand
Total Direct Cost
Impact on GDP
Total Cost

$16.7
$3.9
$28.9
$4.0
$32.9

According to masFlight, the U.S. economy had a loss of $2.5 billion in January 2014
because of delays and cancellations. Lost productivity, hotel expenses and meals for stalled
travelers, cancelled reservations in other cities, missed connections and other factors were
cited for these loses. The airline industry itself lost $150 million.
Two airline specific examples include United Airlines which said it lost $60 million due to
cancelations in the fourth quarter of 2013 and JetBlue Airways which lost $30 million due to
weather.
Dozens of more examples could be used but it clear to see that there is a significant
economic impact due to weather and in the airline business specifically. When bad weather
hits airlines have to ground flights, reroute flights, reposition crews, and assist customers. Also
in consideration is the lost business and the future lost business due to customers not returning
to the airline.

Marks, Joshua. "Updating Airline Cancellation Costs and Customer Disruption. Scribd. Web. 8
Dec. 2014.
De Poto, Tom. "Airline Cancellations Put a Big Chill on the Economy." NJ.com. 9 Feb. 2014. Web.
8 Dec. 2014.
Creedy, Kathryn. "Winter Weather Results in $5.8 Billion Economic Toll on U.S. Passengers,
Airlines and Airports." MasFlight. Web. 8 Dec. 2014.
Brody Guy, Ann. "Flight Delays Cost $32.9 Billion, Passengers Foot Half the Bill." UC Berkeley
NewsCenter. 18 Oct. 2010. Web. 8 Dec. 2014.