Flight Cancellations from Storm Juno Cost U.S. Economy $230 Million

Cancelled flights from the winter storm that struck the upper East Coast this week cost the U.S. economy $230 million in passengers’ lost activity, economists at the U.S. Travel Association calculate.

Each cancelled domestic flight costs the economy $31,600 under a formula U.S. Travel researchers developed last year to highlight air travel infrastructure issues. The economic loss figure of $230 million is based on approximately 7,300 domestic flights cancelled due to the recent storm, according to information derived from media reports.

And that number only accounts for passengers on those flights and the spending they would otherwise inject into the economy, not the impact on the airline industry. Because of discrepancies in how each carrier tabulates its costs, there is no industry-wide data available for the airline sector.

“Storms that affect travel are a fact of life, but being able to calculate the exact economic impact is valuable for how we prepare for them as a nation,” said U.S. Travel President and CEO Roger Dow. “Our air travel infrastructure has been falling behind the rest of the world for years, and Washington cannot agree on how we pay for sorely needed improvements. When an event like Juno comes along, it’s important for politicians and the public to realize that there is a serious cost to consumers and the economy, which we could help mitigate with infrastructure investments.”

U.S. Travel’s 2014 research also determined that every hour a flight is merely delayed, as opposed to cancelled outright, costs the U.S. economy an average of $3,300 in passenger-related economic activity.

The direct-impact figure includes the costs of canceled trips, passenger time lost, missed connections and missed travel activities. The estimates are based on a combination of airline traffic and on-time data; air traveler behavior and characteristics data collected through U.S. Travel surveys; the monthly TravelsAmerica survey conducted by research firm TNS; and U.S. Travel’s proprietary economic models.