Southwest Air Lifts Load-Factor Estimate, Affirms on Revenue

Southwest increased its estimate for September load factor and affirmed its revenue expectation for the month.
Author:
Publish date:

Southwest Airlines  (LUV) - Get Report on Wednesday updated its financial-guidance trends, increasing its outlook for September load factor and affirming its revenue view, and reducing its third-quarter guidance for daily cash burn. 

The company expects its load factor - the percentage of seats occupied by paying passengers - in September to range 45% to 50%, up from its previous estimate of between 40% and 50%. 

October load factor is expected to range between 45% and 55%.

Southwest also affirmed its expectation that revenue would decline 65% to 70%  in September and drop 65% to 75% in October. 

The Dallas airline reiterated its third-quarter capacity outlook: a decline in the 30% to 35% range. 

November capacity is estimated to be down between 35% and 40%. 

Third-quarter cash burn is pegged to slow to $17 million a day from Southwest's original estimate of $20 million.

Capacity and load factor will be affected by Southwest's decision to leave middle seats open on flights through Nov. 30 as .part of social-distancing protocols during the coronavirus pandemic. 

"Southwest has been operating flights with middle seats open throughout the summer and has added thousands of flights to in-demand destinations to provide extra seats for on-board physical distancing and added comfort," Ryan Green, Southwest Air senior vice president and chief marketing officer, said in a statement.

The company is requiring face coverings for all passengers over the age of two throughout their travels. If passengers do not have face masks, the airline will provide them at the airport and on board aircraft. 

Customers will be required to confirm that they do not have coronavirus symptoms and have not been diagnosed with, or exposed to, the virus in the 14 days prior to travel. 

Southwest shares at last check were up 0.5% at $40.81.