Southwest Airlines, encouraged by current bookings in leisure travel, projects demand to surpass pre-pandemic levels in July.
|LUV||SOUTHWEST AIRLINES CO.||50.84||-0.92||-1.78%|
The upbeat forecast comes right after the major U.S. carrier reported a net income of $348 million over the past three months, reversing last year’s loss of $915 million in the same stretch. The airline did so without federal aid, according to Southwest CEO Gary Kelly.
The three-month stretch ending in June "marked an important milestone in the pandemic recovery as leisure travel demand surged," Kelly said in the company's second-quarter earnings report.
Traffic for leisure travel last month "rebounded above June 2019 levels" even as passenger fares increased to pre-pandemic levels, Kelly said.
That reflects the rising number of people taking flights in the U.S. – now about 2 million a day, or about 80% of pre-pandemic levels.
Kelly projected that this trend in leisure travel will continue this month with traffic and fares "expected to trend higher than July 2019 levels."
Kelly's comments underscored the progress that airlines are making in rebuilding after the coronavirus crushed air travel.
However, Southwest, like most carriers, has far to go before they have fully recovered. For instance, while domestic leisure travel is roughly back to normal, business and international travelers are still mostly absent.
"Business revenues continue to lag leisure revenue trends," Kelly said, adding that the airline is "encouraged by the improvement in business revenues" over the past three months.
Throughout July, the airline has experienced "steady weekly improvements in business bookings," according to Kelly.
The Associated Press contributed to this report.