Southwest Airlines Warns Delta Variant May Negatively Impact 3rd Quarter Profits
DALLAS (CBSDFW.COM/AP) — After posting profits in the second quarter, officials with Dallas-based Southwest Airlines now say the highly contagious COVID-19 delta variant has darkened the outlook for the airlines. As it stands, Southwest says it may not turn a profit in the third quarter as infections spread.
The revelation, contained in a August 11 filing with the U.S. Securities and Exchange Commission, comes just three weeks after Southwest CEO Gary Kelly called the airline's most recent quarter a "milestone" after turning its first profit without government assistance in more than a year.
The airline said Wednesday that it was profitable in July, but believes the recent negative effects of the pandemic on August and September revenue will make profitability less likely in the third quarter if the benefits of temporary salaries and wages relief are excluded.
The problems are appearing in what are called close-in bookings and close-in trip cancellations, trips people scheduled several weeks out. The first is falling, the second rising in recent weeks, Southwest said, and it tied those trends to the recent rise in COVID-19 cases.
Shares dropped more than 2% before the opening bell and shares of all other major airlines followed.
(© Copyright 2021 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)