Katrina, Rising Oil Prices Hurt Airlines

The storm caused a a surge in oil prices, forced the closure of several airports and caused scores of flight cancellations throughout the Gulf Coast region Monday.


Hurricane Katrina and oil that spiked briefly above $70-a-barrel on Monday isn't helping. And after Labor Day, air travel traditionally slows.

''I think they're well below a minimum cash position where they should have filed already, but that's just my opinion,'' said Mann, an airline consultant at R.W. Mann & Co. in Port Washington, N.Y.

Airline analyst Joel Denney at Piper Jaffray in Minneapolis said Northwest's situation is equally tenuous.

''One after the other there's been enough things hitting that it continues to push them closer to the edge,'' Denney said. ''They just cannot stand a whole lot more.''

Meanwhile, at the Atlanta airport, the world's busiest in terms of passengers, customers were taking the service interruptions caused by the hurricane in stride. One passenger, Emelda Kador, was passing the time Monday napping with the local newspaper over her head.

''I was going to go to New Orleans for Labor Day weekend, but now my Labor Day plans are canceled,'' said Kador, 52.

Delta shares fell 3 cents, or 2.3 percent, to $1.27 in afternoon trading on the New York Stock Exchange, while shares of Fort Worth, Texas-based AMR Corp., the parent of American Airlines, fell 31 cents, or 2.3 percent, to $13.35 and Continental shares fell 42 cents, or 3 percent, to $13.80. Northwest shares fell 15 cents, or 2.9 percent, to $5.12 on the Nasdaq Stock Market.

Associated Press Writers Dave Carpenter in Chicago, Steve Quinn in Dallas, Josh Freed in Minneapolis and Daniel Yee in Atlanta contributed to this report.

We Recommend