Fixing a number to AA’s woes
How much did all those canceled flights cost American Airlines? Its customers? Other businesses? The Dallas Morning News tried to find out. The newspaper couldn’t get an official figure from American Airlines except that the company expected a to lose “tens of millions” of dollars from the cancellations. Mike Davis, an economist at Southern Methodist University’s Cox School of Business, said the impact may be too small to measure, but the impact will be great nonetheless. “It’s going to cost the airline money it wouldn’t spend, and it’s going to cost other people a lot of money, too,” he told the paper, ” … fancy meals that don’t get eaten, massages that don’t get massaged, and on and on.”
Mike Boyd, an airline consultant in Evergreen, Colo., told the paper that he expected direct costs to American will top $100 million, including lost ticket revenue, hotel rooms and food vouchers for stranded passengers, overtime pay for employees, and the additional cost of getting crew members to the right places. Furthermore, the airline could stand to lose as much as $150 million in lost business as frustrated travelers book elsewhere in the future.
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[...] Airlines | How much do you think last week’s American Airlines flight cancellation dramas cost? Could it possibly have been more than 100 million? Tripso reports on fixing a number to AA’s woes. [...]