Southwest and JetBlue expect higher second-quarter revenue as travel increases

The rebound in travel appears to be even stronger than airlines expected, helping to offset rising fuel prices. Southwest Airlines and JetBlue Airways said Thursday that their second-quarter revenue was on track to be higher than the carriers had previously projected.

The announcements are the latest sign that people are increasingly planning leisure and business trips despite rising coronavirus cases across the country. Many travelers also don’t seem bothered by the high prices of tickets, hotel rooms and rental cars. Flights booked within the United States for this weekend cost an average of $394, a 28 percent increase from the same weekend in 2019, according to Hopper, a travel booking app.

Southwest said in a securities filing that it expects April-June revenue to rise 12 percent to 15 percent over the same period in 2019, versus a previous projection of an 8 percent to 12 percent increase. And while fuel prices are expected to be 5 percent to 11 percent higher than previously expected, higher revenues will “more than offset” higher costs, the airline said. Based on current trends, Southwest said it “expects strong earnings and operating margins” for the second quarter and the rest of the year.

JetBlue similarly said that business was picking up and that it was on track to rake in record revenue this summer. Ticket bookings are beating the airline’s expectations, and revenue for the current quarter is expected to be “at or above” the high end of its previous estimate. Revenue per seat mile flown is expected to be more than 20 percent higher than in the second quarter of 2019, the airline said.

United Airlines issued a similar update last week. The company said revenue per seat mile is expected to rise 23 percent to 25 percent in the second quarter compared to the same period in 2019. United had previously forecast a 17 percent increase.

That improved forecast came a month after United CEO Scott Kirby described flight demand as “the strongest in my 30 years in the industry.”

In the first half of May, consumers spent roughly $4 billion on domestic flights, a 5 percent increase from the second half of April, according to recent analysis from the Adobe Digital Economy Index, which tracks online sales of six of the top 10. US airlines. Bookings increased 2 percent between the last 15 days of April and the first 15 days of May. Sales and expenses increased in May, compared to a similar period in 2019, according to the analysis.

Delta Air Lines said Thursday that it expected to carry 2.5 million passengers over Memorial Day weekend, a 25 percent increase from the same weekend last year but still down from 2 .8 million people who flew during the same weekend in 2019. The company also said it will cut flights this summer in an effort to avoid flight delays and cancellations that plagued airlines last year.

Bad weather, air traffic control disruptions, understaffed vendors and coronavirus quarantines have resulted in “an operation that is not up to the standards set by Delta,” said Allison Ausband, director of airline customer experience, in a statement. Delta plans to eliminate about 100 daily flights from July through the first week of August, representing a 2 percent reduction in its schedule.

Leave a Comment

Your email address will not be published.