Southwest says it’s ‘hopeful’ of return to second-half profit

Southwest said it was “hopeful” of returning to profitability in the third and fourth quarters, amid concerns over the financial impact of a coronavirus variant and a recent rash of flight delays. The potential for an adjusted profit excludes any benefit from billions of dollars in airline aid provided by the US government, Southwest said Thursday as it reported Q2 results. The carrier recorded a profit in June, not counting federal funds, its first since the pandemic began. Delta and United have both predicted a return to profit. Based on current trends, “we are hopeful to be profitable” in the third and fourth quarters, Southwest CEO Gary Kelly said. “Second quarter 2021 marked an important milestone in the pandemic recovery as leisure travel demand surged.” The outlook underscores the industry’s optimism that it’s turning a corner after the worst airline crisis in history, even as the spread of the virulent delta variant of the coronavirus raises investor anxiety about the rebound in flying. Southwest also has been grappling with the worst flight delays in the industry, spurred by staffing shortages and bad weather. Southwest was little changed at $53.07 before the start of regular trading in New York. The shares climbed 14% this year through Wednesday, the second-best performance in Standard & Poor’s index of the five largest US airlines. Leisure traffic and fares are expected to trend higher this month than July 2019 levels, Southwest said, and business bookings have steadily improved in July. Revenue this month will be 10% to 15% lower than July 2019, while August will be down by as much as 17%.<br/>