Southwest Airlines says COVID-19 surge is causing travel cancellations

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Southwest Airlines said it expects a significant drop in revenue as Americans ditch travel plans amid rising COVID-19 cases driven by the Delta variant.

The company said Wednesday it saw 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,” according to a filing with Securities and Exchange Commission.

Southwest said it expects August operating revenue to be down somewhere from 15 percent to 20 percent compared with the same month in 2019.

That’s a worse outlook than the one provided last month that predicted a 12 percent to 17 percent drop from pre-pandemic levels.

The company sees the concerns over the highly contagious strain carrying into September, too — adding that revenue for next month will likely be down 15 percent to 25 percent compared with 2019.

For the full third quarter, it expects revenue to be 15 percent to 20 percent lower than it was in the same period in 2019, the company said Wednesday.

The Dallas-based airline added that it was profitable in July, but said it might not break even in the third quarter.

Shares of Southwest traded slightly up Wednesday morning, which may have been driven by better-than-expected inflation data that showed the price of airfares is beginning to edge down after months of spikes.

It’s at least the second airline to warn that the Delta variant of the coronavirus is beginning to hurt business operations. Frontier Airlines said last week that the impact of the surge in cases is hard to predict, but added that it will likely not reach profitability.

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