SEPTEMBER 6 (Reuters) – Southwest Airlines (LUV.N) warned on Wednesday of a slowdown in leisure bookings in August and, like two other U.S. airlines, saw a third quarter hit by higher oil prices. warned of rising fuel costs.
Largest U.S. airline says August bookings were at the lower end of expectations due in part to seasonal trends, but maintains view that overall leisure demand and yields remain healthy did.
Southwest shares fell 2.6% to close at $29.97.
The forecast comes amid early signs of weakening domestic travel demand as inflationary pressures hit consumers despite airlines signing expensive contracts to retain workers. announced in
United Airlines (UAL.O) and Alaska Airlines Group (ALK.N) also warned of higher fuel prices this quarter after oil prices rose for a third straight month in August on signs of tight supply.
United Airlines said in a regulatory filing that jet fuel prices have risen more than 20% since mid-July.
The company also said it had no immediate plans to move its headquarters from Chicago to Denver after purchasing 113 acres of land in Chicago. At the TD Cowen Transportation Conference, finance chief Gerald Lederman said a top priority was expanding the flight training center in Denver.
Southwest Airlines said it still expects “strong (third-quarter) earnings,” but compared to a 3% to 7% decline in earnings per available seat mile, which is an indicator of pricing power. Reduced to 5-7%. Previous % decline forecast.
Alaska Airlines expects a quarterly adjusted pretax margin of 10% to 12%, below its previous forecast of 14% to 16%.
U.S. airlines typically do not hedge their fuel costs, making them more susceptible to price fluctuations.
“The relatively rapid rise in fuel prices has left the industry with little time to respond through fares,” Citi Research analyst Stephen Trent said in a memo.
Reporting by Mehr Bedi and Abhijith Ganapavaram in Bangalore, with additional reporting by Aishwarya Jain.Editing: Pooja Desai
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