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Power loss entails financial loss

A delivery truck offers added-value customer service to commuters as others walk up the entrance ramp to the Queensborough Bridge after a massive blackout hit the US and Canada, Thursday. PHOTO: AP

US blackouts will deal a huge, still-incalculable financial blow, creating havoc on airlines, thawing frozen goods and shutting out masses of workers, analysts said.

But some areas of the economy and infrastructure took the shock relatively well, in particular the financial system and the Internet.

"It is too early to put a range of figures," said Joel Phipps, power and utilities expert with insurance group Aon Corp.

"You have the potential for a sizeable sum," he warned.

Losses would be felt by already-struggling airlines, subway operators, businesses and households storing frozen foods, along with all companies who lost work hours, he said.

"What we really have to hope for is a very quick return of the system," Phipps said.

Besides the loss of productivity, key pressure points from Thurs-day's outage were:

Airlines

Air travel was thrown into chaos.

The Federal Aviation Administration (FAA) said incoming flights were barred temporarily from five US airports and two Canadian airports.

Airports hit in the US were: New York's JFK, LaGuardia, and Newark; Cleveland; and Detroit. In Canada, affected airports were Toronto and Ottawa.

All airports except for JFK were operational within three to four hours. JFK was back up some five hours after the crisis began.

Major airlines said affected passengers could reschedule their plans without penalty.

"This will definitely hit the bottom line of the carriers' financial results, and that's something they don't need," said Brian Streeval, a consultant with the Boyd Group in Evergreen, Colo. "It depends a lot on the duration."

Financial system

The US Treasury Department had received no reports of disruption to the US banking system.

"The US financial system is extremely resilient," said Treasury Department spokesman Rob Nichols.

Power had been cut after the financial markets closed, Nichols said.

"Our information is that market participants and exchanges were able to shut down in an orderly manner," he said.

"We are actively monitoring the situation and we are in close touch with the financial regulators."

Stocks

The world's biggest stock exchange will open for trading Friday even if officials have to crank up back-up emergency power generators, a New York Stock Exchange (NYSE) spokeswoman said Thursday.

The exchange, which processes more than 1.3 billion share deals on an average day, can fully function on its back-up generators, she said.

The exchange oversees some US$35 billion worth of transactions each day, and is due to open for business at 9:30am.

Internet

Major Internet backbones and Web sites have so far withstood the massive power blackout, said a network analysis group, Keynote Systems.

Keynote said its monitoring of all major US Internet backbones from the 25 largest US cities showed no difficulties and major Web sites were accessible and performing normally.

A few news sites, such as www.cnn.com and www.usa-today.com, had minor problems at the start as masses of surfers scrambled for information, but they quickly recovered, it said.

"As is true of the telephone system, the Internet and major Web sites have been engineered with redundancy and backup power systems to withstand power outages," said Keynote Internet analyst Eric Siegel.

"As long as there isn't major physical damage, such as that caused by the July 2001 Baltimore tunnel fire, or major congestion, such as that caused by the `SQL Slammer' worm [this past] January, the Internet and the Web have enough redundancy and resilience to withstand most problems," Siegel said.
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