United Continental is likely to take at least a $265m financial hit from Hurricane Harvey because of the carrier’s reliance on Houston as one of its biggest hubs, an airline analyst said. Flights at the third-largest US carrier will decline an estimated 1.5% in the current quarter because of the storm, with little opportunity to recoup lost sales, Helane Becker of Cowen & Co. said in a report Tuesday. Houston’s George Bush Intercontinental Airport accounts for about 17% of United’s capacity. The projected losses would more than double the $125m blow Delta suffered when it cancelled about 4,000 flights after April storms in Atlanta. Harvey probably also will prove more troubling than Hurricane Ike in 2008, which cost Continental Airlines $50m two years before it merged with United, Becker said. Harvey “seems more powerful and impactful,” she wrote. Sandy, the storm that hit New York in 2012, “is probably the best comp, given the impact lingered beyond just the initial airport closings. After the airports opened, there was rebuilding to be done, and people just didn’t travel for a while.” United hasn’t issued guidance to investors about the storm’s impact yet. “Our focus right now is on resuming operations out of Houston and helping our customers and employees,” said a United spokeswoman.<br/>
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United Airlines CEO Oscar Munoz is pledging as much as $1m of his own money to match donations to the company’s employee-relief fund in the wake of Hurricane Harvey, according to people familiar with the matter. The CEO encouraged workers to contribute to its United We Care fund for storm-stricken employees in a letter Monday, said the people, who asked not to be identified because the matter is private. “We are all in this together, which is why I will personally match your contributions dollar-for-dollar up to $1 million,” Munoz said, according to the letter. The airline and its customers have also raised more than $1m for a broader public relief effort for Houston, which included a $200,000 contribution by United, said Maddie King, a spokesman for the company. The carrier’s hub at Houston’s George Bush Intercontinental Airport has been closed since Sunday and is likely to reopen Thursday afternoon, according to the FAA.<br/>
A price battle between United and heavy discounters is spreading to other US carriers, threatening to derail the industry’s nascent recovery in pricing power. Competition that heated up this summer in United’s hub cities of Houston, Chicago and Newark, New Jersey, has extended to American Airlines in Dallas and to other carriers, airline executives said. Passenger revenue for each seat flown a mile, a proxy for airlines’ control over fares, had finally started rising this year after a slump triggered by a 2015 price war. While the fare cuts are good news for travelers, they risk hurting earnings throughout the industry. The pain would be particularly acute at full-service carriers, which face higher costs after boosting wages in recent years. Southwest is among the carriers that have been pulled into the fray. “There is definitely a broad-based discounting amongst certain carriers” that has expanded, said Andrew Watterson, Southwest’s chief revenue officer on Monday. “If one or two airlines go off on a price-cutting binge, other airlines go along for the ride. If one airline moves and another does not, you could lose an awful lot of volume and you’re worse off doing nothing.” American Airlines and United Continental are matching -- and sometimes undercutting -- the heavy discounts of Spirit Airlines, said Robert Fornaro, CE officer of the ultra-low-cost carrier. <br/>
Lufthansa aims to take on around a dozen of Air Berlin’s 17 long-haul aircraft and their transatlantic routes in a carve-up of the insolvent carrier, a person familiar with the matter said Tuesday. Air Berlin filed for bankruptcy protection this month after shareholder Etihad Airways withdrew funding following years of losses. At least half a dozen bidders for Air Berlin’s assets are now racing to submit offers by a mid-September deadline, with around 140 leased aircraft and valuable take-off and landing slots in Germany up for grabs. Lufthansa, which currently does not offer long-haul flights from Berlin, is especially interested in the carrier’s routes to US cities including New York, the source said Tuesday. Lufthansa, which has the German government’s backing to take over major parts of Air Berlin, could acquire as many as 90 of its planes, including 38 aircraft it is already leasing from the airline and its leisure unit Niki, another source told Reuters this month.<br/>
TAP Portugal and Brazil's Azul are working on a joint venture so the two airlines can collaborate on pricing of transatlantic flights between Europe and Brazil. "We want to get to full co-operation," TAP chief commercial officer Trey Urbahn said. Urbahn says a joint venture will allow the two airlines to co-operate on pricing and capacity. The two carriers already have a codeshare and want to collaborate further on joint procurement of aircraft and fuel. A joint venture will further seal the relationship between TAP and Azul, who share common ownership links through Azul founder David Neeleman. Neeleman is a shareholder of Atlantic Gateway, which owns a 45% stake in TAP's holding company. Since Atlantic Gateway bought into TAP in late-2015, the airline has embarked on a fleet renewal process and is transforming its European operations into a low-cost operation. Azul's former president Antonoaldo Neves also recently moved to TAP, where he is now a member of the board. Urbahn says Neves will likely succeed TAP's CE Fernando Pinto.<br/>