August 29, 2017 / 4:43 PM / a year ago

Airline profits could feel squeeze from Tropical Storm Harvey

NEW YORK (Reuters) - Tropical Storm Harvey has already caused thousands of flight cancellations around Houston and flooding could cripple regional aviation through the U.S. Labour Day holiday, taking a big bite out of airline profits during one of the busiest travel periods of the year.

The storm has dumped several feet of rain in Houston and the surrounding areas, forcing the temporary closure of three airports.

Airlines have cancelled thousands of flights since the storm made landfall on Friday and normal operations will likely not resume until Wednesday or Thursday even under the best-case scenario.

However, conditions might put off normal service much longer, through the close of the traditionally busy Labour Day travel period, which had been projected to be even busier this year.

The exact financial impact was not yet known, but even minor storms can cost airlines millions of dollars.

A late winter storm earlier this year forced Delta Air Lines (DAL.N) to cancel thousands of flights, resulting in a $125 million negative impact.

Since Sunday, airlines have cancelled more than 5,000 flights into and out of Houston, including all scheduled flights through Wednesday, according to the website that tracks flight delays and cancellations.

Southwest Airlines (LUV.N), one of the region’s largest carriers, said it was possible that the storm could prohibit normal flight schedules at Houston Intercontinental and New Orleans International airports through Sept. 5.

The seven-day Labour Day travel period stretches from Wednesday, Aug. 30 through Tuesday, Sept. 5.

United Airlines (UAL.N), which has a major hub operation based in Houston, has cancelled about 2,000 flights through Thursday.

Reporting by Alana Wise and David Shepardson; Editing by David Gregorio

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