U.S. airlines are preparing for more chaos as the second massive Atlantic hurricane in less than a month barrels toward the United States.
Category 5 hurricane Irma could hit Florida as early as this weekend.
Airlines canceled thousands of flights after Hurricane Harvey left widespread flooding in its wake in southeastern Texas last month. United Airlines was hit particularly hard since it operates a hub in Houston’s George W. Bush Intercontinental Airport, which was closed following the storm.
United Airlines on Wednesday lowered third-quarter unit revenue guidance, to a 3 percent to 5 percent decline on the year, down from a 1 percent decline to 1 percent gain it projected in July. It cited Harvey as well as geopolitical tensions and higher fuel prices as challenges in the three-month period.
The airline said it had canceled more 7,400 flights as a result of the storm.
Major U.S. carriers including Delta Air Lines, American Airlines, United and Southwest are waiving change and cancellation fees or canceling some flights altogether to certain Caribbean airports this week.
Irma is threatening Florida, home to American Airlines hub at Miami International Airport, where it operates frequent service to the Caribbean and Latin America, and busy Fort Lauderdale-Hollywood Airport, where Spirit, JetBlue and Delta Air Lines have a large presence.
American Airlines said it will reposition more planes to get passengers out of some of the islands as early as possible.
While it isn’t clear how costly the storm would be, the busy hurricane season, one of the most severe in more than a decade, could crimp airlines’ bottom lines.
United shed 3.5 percent, JetBlue lost 2 percent and shares of Delta and American recovered from earlier losses, gaining 0.5 percent and 0.8 percent respectively, in late-morning trading.
Jet-fuel prices are up more than 20 percent after Harvey made landfall in Texas, according to data from S&P Global Platts. The storm disrupted operations in the jet-fuel refining hub. Low fuel prices have helped carriers cruise to record profits following a slump in oil prices in mid-2014.
Increased operational costs due to the cancellations along with higher fuel prices could mean a rough end for the third quarter, as airlines including Delta and JetBlue on Tuesday lowered quarterly guidance.
That could mean fuel surcharges for passengers down the road, said Foster Finley, a managing director at consulting firm AlixPartners.
One respite: Irma is set to strike after the peak of the busy summer holiday travel season.