Airlines begin to see drop in travel demand as coronavirus numbers rise
A surge in coronavirus caseloads across the nation is starting to dampen the enthusiasm of leisure travelers. One major U.S. airline is warning the more contagious delta variant could also darken this fall's travel outlook.
Southwest Airlines, the nation's fourth-largest domestic carrier, reported Wednesday it is seeing weaker bookings this month amid a jump in coronavirus infections nationwide. The airline said if caseloads remain elevated, that downward demand trend is likely to extend into September.
The report comes after Southwest earlier this summer reported strong leisure passenger numbers and fares that were above July 2019 levels.
"The Company has recently experienced a deceleration in close-in bookings and an increase in close-in trip cancellations in August 2021, which are believed to be driven by the recent rise in COVID-19 cases associated with the Delta variant," Southwest said in a filing Wednesday.
The announcement is an alarm bell about the delta variant's spread for an industry that last month was expressing confidence that air travel demand would continue to grow. Many airlines last month announced hiring plans to capitalize on travel approaching pre-pandemic levels.
Southwest is the second airline to warn recently that the highly contagious coronavirus variant is taking a hit on air travel. Frontier Airlines last week said it was seeing a decline in bookings.
"The impact of the Delta variant on bookings, and the duration of that impact, are difficult to predict," the carrier said in a quarterly report, saying it expects, at best, to break even in the third quarter because of the variant.
Until this month, airline executives had said there were no significant indications that the delta variant was depressing demand for travel.
After seeing a growing number of people returning to the skies in recent months, Transportation Security Administration officials on Tuesday screened just over 1.7 million passengers at U.S. airport security checkpoints — the lowest since June 15.
Southwest said it is projecting August operating revenue to be down 15% to 20% compared with the same month in 2019.