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Southwest Airlines reported Thursday Leisure travel revenue for the current quarter exceeded forecastsIt highlights the continued popularity of travel despite high inflation.
After the Labor Day weekend, leisure travel typically slows down, however The airline said it still sees “strong revenue trends” in the third quarter.
Investors have been keeping a close eye on the airline’s demand outlook amid concerns that household budgets could suffer from high inflation.
However, they say that the country’s airlines have not yet achieved any significant results.
“Despite being early in the booking curve, the company continues to see strong revenue trends in the fourth quarter of 2022.” Southwest said as it updated its full-year profit forecast.
Related: Southwest opened a nationwide sale
The company cut its forecast for operating income growth in the quarter ended September to 9 percent from 8 percent to 12 percent compared to the same quarter in 2019.
Hobbyist revenue trends continue to exceed 2019 levels and exceed company forecasts. Unfortunately, the same cannot be said for business trips, at least during the summer.
Southwest reported that business travel revenue performance fell less than expected in the period from late July to August, falling 26% to 32% below 2019 levels before rebounding in September.
The company now expects third-quarter revenue to be between 26% and 28% below 2019 levels, compared with a previous estimate of 17% to 21%.
The improvement in the first weeks of September is expected to be 8 to 10 percent higher than in August, especially if it continues in the coming months as more people return to work.
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