S&P Global does not foresee any impact to the ratings of Southwest Airlines or United Airlines from Hurricane Harvey.
In a 31 August report, S&P indicates that while it expects earnings at both Southwest and United to take a hit from the storm – which closed both Houston Hobby and Houston Intercontinental airports for at least four days after hitting the South Texas coast overnight on 25 August – it is not predicting a rating downgrade in result.
United will feel the biggest impact as Intercontinental is its second-largest hub, the ratings agency says. The airport is a large connecting complex for the carrier, with roughly two-thirds of United's passengers there transiting.
"United can, to some extent, reroute passengers or flights, but it will be difficult given already-full flights and the upcoming holiday weekend," says S&P, referring to the upcoming Labor Day holiday weekend.
The Chicago-based carrier cancelled all of its flights through Intercontinental from 27 to 29 August and operated just three arrivals and three departures on 30 August. It operated roughly 30 departures on 31 August and, in a note to employees, says it plans to operate about 140 departures today and 180 departures on 2 September.
Based on these numbers, United will only operate about 29% of 488 departures from Houston Intercontinental listed in FlightGlobal's schedules data for today.
US airlines will carry 6.1 million passengers over the Labor Day holiday weekend from 30 August to 5 September, says industry body Airlines for America (A4A). It is unclear how the closures of Hobby and Intercontinental will impact this.
United told FlightGlobal on 31 August that it was repositioning aircraft and crews to other hubs to handle the additional traffic over the holiday weekend, as well as to resume normal service levels.
The airline does not expect to return to its full schedule in Houston for several weeks, it says.
Southwest plans to resume operations at Houston Hobby, its seventh-largest base, on 2 September, the Dallas-based carrier says.
The airline is scheduled to operate 152 departures from Hobby today, and has up to 164 flights a day from the airport, FlightGlobal schedules data shows.
"We would expect the earnings damage to Southwest to be less than United given its scale of operations there, and we foresee no ratings implications," says S&P in its report.
In a 29 August report, Cowen forecast roughly $265 million in lost revenue at United and $77 million at Southwest, based on both Hobby and Intercontinental reopening on 31 August.
"The financial impact's going to be what it's going to be," United president Scott Kirby told reporters at the Boyd International Aviation Forecast Summit in Las Vegas on 29 August.
Source: Cirium Dashboard