Southwest Airlines (LUV) - Get Report is the latest airline to take a hit from the coronavirus, with the carrier warning of a decline in first-quarter operating revenue as consumers and companies alike cut back on air travel.
Shares of Southwest fell 3% to $45.52 a share in premarket trading Thursday after the airline warned it could take a $200 million to $300 million blow to first-quarter revenue amid a rash of cancellations in recent days.
In a filing with the Securities and Exchange Commission, Southwest said it now expects the key metric, revenue per available seat mile, or RASM, to come in somewhere between a 2% drop and a 1% gain.
That's down from the airline's earlier first-quarter estimates of a 3.5% to 5.5% gain in revenue per available seat mile.
Still, Southwest said the impact on revenue by the coronavirus-driven drop in flight demand will be offset somewhat by a decline in fuel prices to $1.90 to $2 a gallon, down from its previous estimate of $2.05 to $2.15 a gallon.
The drop in fuel prices, combined with milder winter weather, could temper the expected loss in revenue, with a likely decline of 1%, about midway in the range it has projected, Southwest said in the filing.
JetBlue is reducing flight capacity by 5%, while United has said it will cut domestic flights by 10% in March, and international flights by 20%, in response to lower demand in the wake of the global coronavirus epidemic.