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Southwest Airlines warns of continued soft bookings, elevated cancellations due to COVID and Hurricane Ida

Southwest Airlines Co. shares
LUV,
-0.84%

slid 1.3% in premarket trading Thursday, after the airline warned that it is still seeing softness in bookings and elevated cancellations, mostly due to the rise in COVID-19 cases caused by the highly infectious delta variant. The company said August operating revenue performed near the low end of its guidance range, due to a pullback in leisure passenger traffic and trip cancellations. “August 2021 managed business revenues decreased approximately 64 percent compared with August 2019, relatively in line with July 2021 managed business revenues down approximately 63 percent compared with July 2019, as business demand stalled in August 2021 following several months of sequential improvements,” the company said in a regulatory filing. The weak trends have persisted through September and are expected to remain in October, while managed business bookings are expected to remain relatively stable compared with August. Travel demand for Labor Day was “solid,” but with higher-than-expected cancellations due to Hurricane Ida. “Based on current bookings, the Company is experiencing fairly typical booking patterns for holiday travel periods in fourth quarter 2021,” the airline said. The company is expecting its third-quarter load factor to range from 80% to 85%, and for its October load factor to range from 75% to 85%. Shares have gained 3% in the year to date, while the S&P 500
SPX,
-0.13%

has gained 20%.

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