American Airlines takes $50M hit from Hurricane Florence

Morning Business Outlook: The economic cost of Hurricane florence could be as much as $50 billion, according to Moody's Analytics; Congress may requiring the FAA to establish minimum airline seat sizes.

Hurricane Florence cut American Airlines’ pretax profit by $50 million in the last quarter, the company said Tuesday.

Florence, which brought record-setting floods to the Carolinas in September, forced American Airlines to cancel approximately 2,100 flights. The storm reduced third-quarter revenue by $55 million.

Shares dropped to a 52-week low on Tuesday and have lost 31 percent of their value this year.

Rival airlines fell in sympathy. Delta Air Lines, United Continental and JetBlue Airways were down in midday trading.

Despite the storm’s impact, American Americans raised its outlook for a key metric. The company said revenue per each seat flown a mile will climb about 2 percent to 3 percent compared to the same period last year. American Airlines previously issued guidance for 1 percent to 3 percent growth.

Strong domestic results contributed to the brighter outlook, although revenue per available seat mile lost about a half-percentage point due to Florence.

Airlines have already begun grounding scheduled flights ahead of Hurricane Michael, a Category 2 storm that’s expected to make landfall Wednesday along the Florida Panhandle.

Flights operated by American Airlines, Southwest Airlines and United were among those canceled by Tuesday morning, according to USA Today.