Southwest Airlines Warns It'll Be Difficult To Be Profitable In Q3

Southwest Airlines Co LUV reported that July 2021 operating revenues performed in line with expectations, a decrease of ~12% (estimated a reduction of 10-15%) compared to July 2019, driven primarily by strong leisure passenger traffic and fares above July 2019 levels.
Capacity (available seats per miles) was up 41% year-over-year and down 3% compared to July 2019. The load factor was ~87%.
July 2021 managed business revenues also performed according to expectations and decreased ~63% compared with July 2019.
Southwest Airlines has experienced a deceleration in close-in bookings and an increase in close-in trip cancellations in August 2021 due to a rise in COVID-19 cases associated with the Delta variant and believes these trends will make it difficult for the Company to be profitable Q3.
The Company continues to expect 3Q21 unit costs to increase in the range of 1 to 5 %, compared with 3Q19, and economic fuel costs to be $2.05 to $2.15 per gallon.
August 2021 operating revenue is estimated to be down 15% to 20% compared to 2019 (prior expectations were lower by 12% to 17%).
Southwest Airlines sees 3Q21 operating sales down 15-20% vs. 2019 levels, load factor 80-85%, and available seat miles up ~49% Y/Y.
As of August 9, 2021, the Company had cash and short-term investments of ~$16.9 billion.
Price Action: LUV shares are trading lower by 0.03% at $51.10 during the market session on Wednesday.
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