The Associated Press
Southwest Airlines had a small third-quarter profit, but noted that demand from travelers â¿¿ especially lucrative business travelers â¿¿ was weak in September.
The airline said it's seeing signs that September was just a blip, and that demand is picking up again this month. But business travel is a canary in the coal mine for both airlines and the broader economy. So there's strong interest in an airline's comments on business travel.
On Thursday, Morgan Stanley analyst John Godyn noted that Gary Kelly, Southwest's CEO, has been through a number of economic ups and downs over the years, so he asked Kelly to compare what he's seeing today to how things have looked at other times that economic growth was sluggish. And, Godyn asked, how do he know that September's weakness was the blip? What if it's October's strength that doesn't fit with the trend?
Kelly: "This period since 2008 is unlike anything we've ever seen. ... It's really the same story, for the economy, for travel demand, and for the oil markets. They're extremely volatile. I think the bottom line answer to your question is that I don't think we can be sure that September is just a blip. ...
"I looked back at our earnings plan for the year again this morning. We were ahead of plan as of June. And now all the sudden, three months later we find ourselves pretty significantly behind plan for the year. That's how fast things have turned on us, and why it makes it really tough to predict from here."