Southwest Airlines warns coronavirus rebound is fading
The airline sees a 'deceleration in improving revenue trends'
Southwest Airlines Co. says a pickup in bookings over the past three months is slowing as a second wave of COVID-19 infections sweeps across the country.
The spike is aggravating a slowdown the Dallas-based airline had expected to occur around the U.S. presidential election, executives said in a regulatory filing that described a "deceleration in improving revenue trends for November and December."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LUV | SOUTHWEST AIRLINES CO. | 32.40 | +0.37 | +1.16% |
A record of nearly 143,000 new COVID-19 cases was recorded on Thursday, an 89% rise from the previous peak of 75,687 set on July 16. More than 10.4 million Americans have been infected with the virus while 241,800 have died.
The COVID-19 pandemic brought air travel to a near standstill earlier this year as governments ordered people to eliminate nonessential travel.
TSA checkpoint traveler numbers plunged by as much 96% year-over-year in April and have slowly been recovering, returning to 38% of last year’s numbers.
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Southwest said it expects operating revenue to be 60% to 65% of last year and forecasts a similar weakness in December.
Fourth-quarter capacity will be 40% below a year ago, and the airline sees the potential for a slight improvement in January.
Southwest received $3.3 billion of assistance in July as part of the government’s bailout for the industry. Another $94 million of payroll assistance was allocated by the Treasury Department in September.
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Shares were down 20% this year through Wednesday, underperforming the S&P 500’s 11% gain.