The upturn in travel is even stronger than airlines expected, helping to offset rising fuel prices. Southwest Airlines and JetBlue Airways said Thursday their second-quarter revenues were on track to exceed the companies’ expectations.
The announcements are the latest sign that people are increasingly planning vacation and business trips, despite an increase in coronavirus cases across the country. Many travelers also don’t seem to be bothered by high prices for tickets, hotel rooms and rental cars. Flights booked for this weekend within the United States cost an average of $394, up 28 percent from the same weekend in 2019, according to Hopper, a travel booking app.
Southwest said in a securities filing that it expects April through June revenues to rise 12 to 15 percent over the same period in 2019, compared to a previous forecast of an 8 to 12 percent increase. And while fuel prices are expected to be 5 to 11 percent higher than previously expected, higher revenues will “more than offset” those increases in costs, the airline said. Based on current trends, Southwest said it expects “solid profits and operating margins” for the second quarter and the remainder of the year.
JetBlue similarly said that things were improving and that it was on track to rack up record revenue this summer. Ticket bookings exceed the airline’s expectations, with revenue for the current quarter expected to be “at or above” the top of its prior estimate. Revenue per seat per mile flown is expected to be more than 20 percent higher than in the second quarter of 2019, the airline said.
United Airlines released a similar update last week. The company said revenue per seat per mile is expected to rise 23 to 25 percent in the second quarter compared to the same period in 2019. United had previously forecast an increase of 17 percent.
Last month, United CEO Scott Kirby described flight demand as “the strongest in my 30 years in the industry.”
In the first half of May, consumers spent an estimated $4 billion on domestic flights, up 5 percent from the second half of April, according to a recent analysis of the Adobe Digital Economy Index, which tracks online sales of six of the top 10 US airlines. Bookings increased 2 percent between the last 15 days in April and the first 15 days in May. Revenue and expenses rose in May, compared to a comparable period in 2019, the analysis shows.
Delta Air Lines said on Thursday it is expected to fly 2.5 million passengers over Memorial Day weekend, up 25 percent from the same weekend last year, but still less than the 2.8 million people who flew over the same weekend. flown in 2019. trim flights this summer in an effort to avoid flight delays and cancellations that plagued airlines last year.
Bad weather, air traffic control disruptions, understaffed suppliers and quarantines due to the coronavirus have resulted in “an operation that has not consistently met the standards set by Delta,” Allison Ausband, the airline’s chief customer experience officer, said in a statement. Delta plans to cut about 100 daily flights from July through the first week of August, a 2 percent reduction in its schedule.
