That’s just one of the headwinds facing the discount airline. Southwest warned Thursday that it believes revenue will take a $100 million hit this quarter from the lingering effects of the Covid surge caused by the Delta variant — even though bookings have improved recently, especially during the upcoming holiday travel period. About $40 million of that hit is expected to come in October.
Still, that’s an improvement from the revenue hit in the third quarter, when the airline believes it lost $100 million in sales in August alone and $200 million in September because of reduced flying caused by the Covid surge.
Overall the airline reported that third-quarter revenue reached $4.7 billion, up 161% from a year ago but down 17% compared with third quarter of 2019 ahead of the pandemic.
The company reported a third-quarter loss, excluding special items, of $135 million. That was a bit smaller than forecast by analysts. Including the $763 million it received from the most recent round of federal assistance, the company posted net income of $446 million in the quarter.
“We have reined in our capacity plans to adjust to the current staffing environment, and our ontime performance has improved, accordingly,” said CEO Gary Kelly. “We are aggressively hiring to a goal of approximately 5,000 new employees by the end of this year, and we are currently more than halfway toward that goal.”
Revenue at American nearly reached $9 billion, up 183% from a year ago, but it was still down 25% from where it was in the third quarter of 2019, before the start of the pandemic.
The third quarter included a summer travel period which started out strong for most airlines before the Covid surge caused people to cut back on travel.
Still the airlines are reporting that bookings during the holiday travel season, one of the busiest times of the year, remain strong.
Shares of Southwest and American were both slightly higher in pre-market trading Thursday.