ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, January 10, 1996 TAG: 9601100140
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
IT WAS A COSTLY STORM, this blizzard of '96. The cost to commerce - customers not buying and workers not working - could be in the hundred of millions.
As Easterners shoveled, blew and melted away snow left behind by the Blizzard of '96, the storm's toll on retailers, airline companies and others started to come clear.
Sales lost to shuttered department stores and grounded jumbo jets ran into millions - perhaps hundreds of millions - of dollars, and it was unclear Tuesday how much could be made up. Work left undone by snowbound employees hurt companies large and small.
While some businesses benefited, like tow-truck operators and snowblower providers, most did not. The vastness of the area blanketed by the storm made certain the figures would be staggering.
``In economic terms, given the size of the economy, I think it'll be kind of an eye-popping number in the end,'' said Jeff Schmidt, managing principal at the consulting firm Towers Perrin.
``But in terms of the economic health of the companies involved, I don't think anybody's going to go bankrupt over this.''
Small retailers, huge department stores, major airline companies and others shut their doors in large numbers Monday as the blizzard's howling winds and heavy snow made travel difficult. While conditions eased Tuesday, many desks and shops remained empty.
The impact on business was expected to be heaviest at places where customers might not postpone purchases but cancel them altogether, such as bars, restaurants and movie theaters.
Big department stores and other retailers were a slightly different story as customers could simply put off their purchases.
``The net of it is that it will hurt business,'' said Wayne Hood, a retail analyst at Prudential Securities Inc. ``I would characterize it as hundreds of millions of dollars.''
For those who did purchase new hats and gloves to brace against the elements, traveling anywhere with their new goods was difficult. Air travel was affected for a third day Tuesday.
Continental Airlines canceled 415 flights, down from 600 cancellations Monday but still a big chunk of its average 1,300 daily flights. Other airlines reported similar difficulties.
``They'd be one of the worst hit, the airlines,'' said Lee Howard, president of Airline Economics International Inc., a consulting firm. He estimated lost revenue would mount into the millions of dollars.
Passengers stranded by the storm needed to be flown home, at no additional cost. Some who had booked outgoing flights simply canceled their plans. Meanwhile, airlines continued paying their aircraft leases, facility fees and the like.
Another problem for companies was the fact that so many workers stayed home Monday, but still were being paid. Their undone tasks also would have to be made up - perhaps on overtime.
``What you have is companies forced to put money into restoration of service without showing any additional output,'' said Audrey Freedman, president of the consulting firm Audrey Freedman & Associates. Again, the costs were estimated to climb into the millions of dollars.
While such numbers on their face give pause, the U.S. economy's size and breadth should be able to mitigate the damage.
Jason Bram, an economist at the Federal Reserve Bank of New York, estimated the area hardest hit by the storm - from Virginia to New England - accounts for about one-third of U.S. economic output, which stands at about $7 trillion a year.
``When you come back a year from now and ask what effect did this have on the economy, we'll probably say not much,'' he predicted.
LENGTH: Medium: 81 lines ILLUSTRATION: PHOTO: AP. Passenger jets are grounded at the United Airlinesby CNBterminal at Newark Airport on Tuesday morning. The blizzard of '96
forced the closure of the New York City area airports, as well as
other modes of travel. Continental Airlines canceled 415 flights,
down from 600 cancellations Monday but still a big chunk of its
average 1,300 daily flights. Other airlines reported similar
difficulties. color.