The travel rebound is shaping up to be even stronger than airlines had thought. Southwest Airlines and JetBlue Airways said on Thursday that their revenues in the second quarter were on track to be higher than they had projected.
Despite an increase in coronavirus cases across the country, people are increasingly planning leisure and business trips. Travelers seem unbothered by the high prices for tickets, hotel rooms and rental cars. According to Hopper, flights booked within the United States for this weekend cost an average of $394 which is a 28 percent increase from the same weekend in 2019.
Southwest said in a securities filing that it expects revenues from April through June to increase between 12 and 15 percent, up from a previous projection of 8 to 12 percent. Higher revenue will be more than offset by the rise in costs, the airline said. Southwest expects solid profits and operating margins for the second quarter and the rest of the year based on current trends.
Daily business updates The latest coverage of business, markets and the economy, sent by email each weekday.The business was improving and the company was on track to collect a record revenue this summer. The airline expects revenue for the current quarter to be at or above the high end of its previous estimate. The airline expects revenue per seat per mile flown to be more than 20 percent higher than in the second quarter of 2019.
Last week, United Airlines issued an update. Revenue per seat per mile is expected to increase between 23 and 25 percent in the second quarter compared with the same period in 2019. The previous forecast was for a 17 percent rise.
Scott Kirby, United's chief executive, described demand for flights as the strongest it has been in his 30 years in the industry.
In the first half of May, consumers spent an estimated $4 billion for domestic flights, a 5 percent increase over the second half of April, according to a recent analysis by the Adobe Digital Economy Index. Between the last 15 days of April and the first 15 days of May, bookings were up 2%. The analysis found that sales and spending were up in May.
Delta said it expected to fly 2.5 million passengers over Memorial Day weekend, a 25 percent increase from the same weekend last year, but still below the 2.8 million people flown over the same weekend in 2019. The company said that it would reduce flights this summer in order to prevent flight delays and cancellation that bedeviled airlines last year.
Bad weather, air traffic control disruptions, understaffed vendors and coronaviruses have resulted in an operation that isn't consistently up to the standards Delta has set. Delta will cut about 100 flights from July to August, a 2 percent reduction in flights.