Airlines are starting to put a price tag on the latest terror threat.
said Tuesday last month's foiled plot cost it $76 million in lost revenue and increased costs. U.K. authorities said on Aug. 10 they had halted a scheme to blow up as many as 10 planes bound for the U.S.
said last week that August revenue per available seat mile fell 1.5 points from the same month a year earlier, as a result of elevated security concerns tied to the foiled plot.
Other major trans-Atlantic carriers haven't yet issued August traffic reports. They may not disclose the impact of the latest terror threat until their quarterly earnings reports this fall.
unit American Airlines said Tuesday the impact may be hard to quantify. American has been reporting traffic declines resulting from reduced capacity. "There may be some decline mixed in there from security issues, but it's not clearly appreciable," said spokesman Tim Wagner.
British Airways attributed its decreases primarily to lost revenue that resulted from canceling about 1,280 flights. It also cited increased costs for hotel accommodations, catering and baggage repatriation.
Additionally, the airline said future bookings are lagging due to new restrictions at London airports. British Airways has its hub at London's Heathrow Airport, where terrorists had intended to board aircraft.
"The overall level of bookings has returned to levels experienced last year, but is still weaker than the trend of the past few months," British Airways said. "The recovery of premium and nonpremium transfer traffic, for example, is lagging due to the limitations on carry-on baggage at London."
Because the terrorists planned to use liquid explosives, security officials have imposed new regulations that prevent liquids and toiletries from being carried onto planes. Passengers flying from U.K. airports are subject to additional restrictions: They are limited to a single small carry-on bag, and secondary security searches are conducted at the gate for flights to the U.S.
At Continental Airlines, the loss of 1.5 points in both consolidated and mainline RASM performance was higher than analysts had expected. The airline said that consolidated August RASM rose between 6.5% and 7.5%, while mainline August RASM grew 5.5% to 6.5%, less than July increases of 9.6% for consolidated operations and 8.9% for mainline operations.
"Frankly, the magnitude, if accurate, surprised us," said JP Morgan analyst Jamie Baker in a report. He added that with the stock up 5% since the eve of the thwarted attacks, "the market appears to have understandably looked through the anticipated short-term demand impact." JP Morgan has an investment banking relationship with Continental.
Merrill Lynch analyst Mike Linenberg said Tuesday that he, too, was surprised by the impact on RASM, although it has been offset by lower fuel costs. Linenberg said he maintains a neutral rating on Continental shares because, while earnings prospects are good, "near-term geopolitical and weather concerns are likely to keep the stock range-bound." Merrill Lynch has a financial relationship with Continental that includes ownership of 1% or more of its stock.