Poor Aug. bookings for Southwest amid high fuel prices reported by US Airlines

Southwest Airlines said on Wednesday that August leisure bookings were softer than expected and that it expects higher fuel costs in the third quarter due to rising crude oil prices. The company said that overall leisure demand and yields remain healthy, but that the softer bookings were due in part to seasonal trends. Shares of Southwest closed down 2.6% at $29.97.


United Airlines and Alaska Air Group also warned of higher fuel costs in the third quarter. United said that jet fuel prices have climbed over 20% since mid-July. The carrier also said that it has no imminent plans to move its headquarters to Denver from Chicago, despite buying 113 acres of land there.

EN - 728x90

Southwest said that it still expects to make a "solid" profit in the third quarter, but that it has trimmed its expectations for revenue per available seat mile. Alaska Air expects its adjusted pre-tax margin to be 10% to 12% in the third quarter, down from its prior expectation of 14% to 16%.

Save Money 728x90

U.S. airlines do not generally hedge against fuel costs, which makes them vulnerable to price swings. Citi Research analyst Stephen Trent said that the recent jump in fuel prices has given airlines little time to respond by raising fares.

Post a Comment

Previous Post Next Post

1 / 3
2 / 3
3 / 3
EN - 728x90