Southwest Air Sees Lower Demand Amid Coronavirus, Cuts Sales Guidance

Southwest Air Co LUV 8-K filing shows warning "in recent days, the company has experienced a significant decline in customer demand, as well as an increase in trip cancellations" likely related to coronavirus concerns.

The company sees first-quarter operating sales to be negatively impacted by $200-$300 million, and cut RASM guidance from up 3.5-5.5% year-over-year to down 2% to up 1%.

Southwest Air cut first-quarter operating costs per available seat mile ex fuel, oil expense guidance from up 6-8% year-over-year to 5-7%, citing less severe weather than expected during first quarter 2020 resulting in a higher completion factor.

See Also: Huge Option Trades In Delta Air Lines On News Of Buffett Buying, Travel Concerns

“While it is difficult for the Company to estimate the duration and severity of the impact from COVID-19, the company remains financially strong," the company said. "The company has a strong, investment-grade balance sheet with ample liquidity. As of March 3, 2020, the Company had approximately $5.3 billion in cash and short-term investments and a fully available unsecured revolving credit line of $1.0 billion.”

United Continental UAL has also been impacted by the virus and is planning fewer flights in April as the ongoing coronavirus epidemic hits demand for travel.

Southwest Airlines shares were trading down 3% at $45.51 in Thursday’s pre-market session. The stock has a 52-week high of $58.83 and a 52-week low of $44.34.

Posted In: NewsGuidanceTravelGeneralCoronavirus
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...