Southwest expects the Delta variant to crimp demand
Southwest no longer expects to turn a profit in Q3 as a recent rise in coronavirus cases slows sales and drives an increase in cancellations. In a securities filing on Wednesday, the company forecast revenue for the three months that end in September to be down 15 to 20% from the same period in 2019, a decline of three to four percentage points from its previous estimate. The revised forecast is a rapid turnaround from a few weeks ago, when Southwest and other major carriers said that business was booming and that the highly contagious Delta variant of the virus was not yet affecting sales. In fact, Southwest said Wednesday that it was profitable again in July, but that it no longer expected to turn a profit for the current quarter, at least after excluding the effect of federal payroll aid to the industry. Late last month, Scott Kirby, the CE of United, said the Delta variant had not affected sales at all. “The most likely outcome is that the recovery in demand continues largely unabated,” he said on a call to discuss quarterly financial results with analysts and reporters. After climbing for months, the number of people flying in the United States appears to have stagnated in recent weeks at about 80% of 2019 levels, according to TSA airport screening data. Still, more than 2.2m people were screened on Aug. 1, the most relative to 2019 since the pandemic began. The rebound so far has mainly been driven by people traveling on vacations or visiting friends and family.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2021-08-12/unaligned/southwest-expects-the-delta-variant-to-crimp-demand
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Southwest expects the Delta variant to crimp demand
Southwest no longer expects to turn a profit in Q3 as a recent rise in coronavirus cases slows sales and drives an increase in cancellations. In a securities filing on Wednesday, the company forecast revenue for the three months that end in September to be down 15 to 20% from the same period in 2019, a decline of three to four percentage points from its previous estimate. The revised forecast is a rapid turnaround from a few weeks ago, when Southwest and other major carriers said that business was booming and that the highly contagious Delta variant of the virus was not yet affecting sales. In fact, Southwest said Wednesday that it was profitable again in July, but that it no longer expected to turn a profit for the current quarter, at least after excluding the effect of federal payroll aid to the industry. Late last month, Scott Kirby, the CE of United, said the Delta variant had not affected sales at all. “The most likely outcome is that the recovery in demand continues largely unabated,” he said on a call to discuss quarterly financial results with analysts and reporters. After climbing for months, the number of people flying in the United States appears to have stagnated in recent weeks at about 80% of 2019 levels, according to TSA airport screening data. Still, more than 2.2m people were screened on Aug. 1, the most relative to 2019 since the pandemic began. The rebound so far has mainly been driven by people traveling on vacations or visiting friends and family.<br/>
