By Dhirendra Tripathi
Investing.com -- Southwest Airlines stock (NYSE:LUV) was down 2.2% in Wednesday’s premarket trading as the airline warned it may not be profitable in the third quarter.
The carrier blamed the spread of the Delta variant for the rise in cancellations and bookings getting hit.
Based on the assumption that COVID-19 cases remain elevated in the near-term and current revenue trends in August continue into September, the company said its outlook for the ongoing quarter operating revenue has worsened by an estimated 3-4 points from its previous outlook three weeks ago, compared with third quarter 2019.
The company has now forecast third-quarter operating revenue to be lower by 15%-20% compared to the 2019 period.
The company reiterated that its operating revenue outlook for August is impacted by less holiday travel, an estimated 1-2 point headwind, compared with August 2019, as the Labor Day holiday weekend falls in September this time, whereas it was split between August and September in 2019.
Travel demand for the Labor Day holiday weekend remains healthy, thus far, the airline said.