In ProgressPhoto | iStock Editorial | Getty Images
Southwest Airlines said on Wednesday it expects to be profitable in the fourth quarter, thanks to stronger than expected leisure travel demand despite the emergence of the omicron variant of Covid.
The Dallas-based carrier is forecasting a 10-15% drop in revenue in the fourth quarter compared to the same period in 2019, when it generated $ 5.73 billion. Southwest also lowered its fuel cost forecast for the quarter slightly to no more than $ 2.25 per gallon, from a range of $ 2.25 to $ 2.35 per gallon.
Southwest’s forecast precedes an Investor Day presentation scheduled for Wednesday at noon. In 2022, the airline said it expects to be profitable and estimated its capacity could range from a 3% drop from 2019 to 2% growth and costs, excluding fuel, up to ‘at 12% higher than in 2019.
The airline is on a hiring wave, aims to add some 8,000 workers next year in addition to 5,000 new employees this year.
Southwest’s network is concentrated in the United States, so it’s less exposed to a host of new travel restrictions that governments have implemented since the variant was detected late last month.
Earlier Wednesday, Willie Walsh, chief executive of the International Air Transport Association, told an industry webinar that the new travel restrictions in response to omicron, which range from new testing requirements to the outright ban on foreigners, will likely hurt demand in the short term. but that it is too early to assess the impact.