Southwest Airlines braced for $300 million hit from coronavirus
Impact from the coronavirus outbreak may cost Southwest Airlines up to $300 million in lost revenue.
It has placed a $200-300 million range on the impact to first quarter operating income.
The airline says it had good booking volume which had matched its earlier guidance but that has slumped ‘in recent days.’
Travel demand has now significantly declined and travelers are cancelling trips.
This is ‘assumed to be attributable to concerns relating to reported cases of COVID-19,’ Southwest said in a filing.
In an interview, CEO Gary Kelly likened it to the rapid decline in demand after 9/11.
It expects unit revenue to decline by up to 2%, well down from its guidance of 3.5-5.5% growth.
Southwest doesn’t fly to any coronavirus hotspots but the concerns about air travel are hitting the home market.
US airlines have started trimming domestic schedules as the appetite for travel has significantly waned, ahead of the busy spring break season.
United Airlines and JetBlue have both announced cuts to their US schedules and more airlines could follow.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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