In the Second Quarter (Q2), most of the U.S. carriers including Southwest Airlines did the Romance with the Travel bookings, as vaccation deprived flyers rushed to the Airports. But, scenario seems to be changing fast as the Dallas based Airline lowered its revenue and profit forecast for Q3 on Wednesday.
Airline says, highly Contagious COVID-19 delta variant is responsible for the third Quarter weaker bookings. With this Southwest became the second carrier after 'Frontier Airlines' to reveal such a concern that is seeing an affected Travel booking.
The recent revelation, was part of an August 11 filing with the U.S. Securities and Exchange Commission, that comes just three weeks after Southwest CEO Gary Kelly called the airline’s most recent quarter a “milestone” after turning its first profit without government assistance in more than a year due to Pandemic.
“The Company has recently experienced a deceleration in close-in bookings and an increase in close-in trip cancellations in August 2021, which are believed to be driven by the recent rise in COVID-19 cases associated with the Delta variant,” Southwest said in a filing.
Southwest foreseeing August operating revenue to be down 15% to 20% compared with the same month in the year 2019, compared with an earlier forecast for a 12% to 17% drop.
Southwest celebrates 50 years since its first flight which took place on June 18, 1971.
The problems company witnessing are the 'close-in bookings' and 'close-in trip cancellations' , trips people scheduled several weeks prior. The first is falling, the second rising in recent weeks, Southwest said, and it tied those trends to the recent rise in COVID-19 cases.
Its shares of the company fell more than 2% in premarket trading as it expects September revenue to be down 15% to 25% from 2019.
The airline said Wednesday that it was profitable in July, but the impact of the rapidly spreading Delta variant in August and September will make it very difficult for the carrier to turn a profit in third quarter without counting federal aid that’s provided some temporary relief in covering its labor costs.
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