It’s a kind of good-news-bad-news story for Southwest Airlines (NYSE:LUV). The carrier says variant of COVID-19 hurt staffing and bookings, but it said profits are on the table by March and for the rest of the year.
Southwest’s rivals Delta Air Lines (NYSE:DAL), United Airlines (NASDAQ:UAL) and American Airlines (NASDAQ:AAL) earlier this month also said they expect that the fast-spreading variant would further delay a recovery in travel demand but that bookings for spring and summer were strong.
"While we made significant progress in 2021, the Omicron variant has delayed the demand improvement we were previously expecting in early 2022," said Bob Jordan, who takes the reins as Southwest CEO on Feb. 1.
"With COVID-19 cases trending downward, the worst appears to be behind us, and we are optimistic about current bookings and revenue trends for March 2022."
Airlines had canceled more than 20,000 flights between Christmas Eve and the first week of the year, hit by a combination of bad weather and a lack of available crews as omicron spread through employee ranks and nationwide.
Both leisure and business travel bookings are weaker than expected and will likely cut operating revenue in January and February by a total of $330 million, Southwest said Thursday. For the first three months of the year, Southwest expects revenue of 10% to 15% below the first quarter of 2019, when it generated $5.15 billion.
LUV shares gave back 48 cents, or 1.1%, to $43.23 early Thursday.
