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Spike in COVID-19 cases is starting to hurt air travel

Aug. 11, 2021
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3 min read
Southwest Airlines Boeing 737 Denver Las Vegas
Spike in COVID-19 cases is starting to hurt air travel
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America's largest domestic airline warned Wednesday that a rising number of COVID-19 cases is starting to hurt its business.

Southwest Airlines "has recently experienced a deceleration in close-in bookings," the company noted in a filing with the Securities and Exchange Commission. Southwest said that was paired with "an increase in close-in trip cancellations in August 2021." The airline blamed the recent rise in COVID-19 cases associated with the delta variant.

If those trends continue, Southwest predicts its revenues will be 3% to 4% lower than what it had told Wall Street just three weeks ago. If the trend continues, Southwest warned that it might not be profitable in the July-to-September quarter, traditionally one of the busiest and most-profitable for airlines.

The news comes a week after budget carrier Frontier Airlines announced that it also was seeing a drop in bookings, something it also tied to the delta variant.

Industry experts had predicted that leisure travel would start to wane in September as schools and offices reopened. Business travel was supposed to start to tick up.

But now that outlook may prove to be too optimistic. Many major companies have pushed back their office reopening plans. And if nobody is in the office, then there is little reason to travel to visit clients.

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More: Southwest Airlines CEO says Miami push part of long-term strategy, not ‘pandemic play’

While borders are finally reopening for Americans to countries including the United Kingdom and Canada, the timing couldn't be worse with the Centers for Disease Control and Prevention saying that most of the country is experiencing substantial or high levels of COVID-19 community transmission.

Personally, my family on Tuesday decided to cancel our long-planned trip in late August to Aruba following the CDC's announcement Monday adding Aruba, France, French Polynesia, Iceland, Israel and Thailand to its "avoid travel" list. (Sorry Delta Air Lines but we redeposited 276,000 SkyMiles back into my account for those three first-class tickets - I had purposely booked with miles for added flexibility.) We have a six-year-old daughter who isn't vaccinated and felt it wasn't right to travel with her or risk a positive test and being stranded in Aruba, unable to come back to the U.S.

It pains me that we are now back in the mindset of canceling trips again. If you are thinking about doing so, TPG's Benji Stawski has a great guide here about what you need to do if you plan to cancel your vacation.

The team at TPG is going to continue to update you on the impact of the delta variant on travel as well as the latest government advisories.

Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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  • Intro Offer

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  • Annual Fee

    $325

  • Recommended Credit

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Why We Chose It

There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)

Pros

  • 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
  • 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
  • Packed with credits foodies will enjoy
  • Solid welcome bonus

Cons

  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber and other dining credits
  • You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
  • Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
  • Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
  • Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
  • $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
  • $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
  • $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
  • Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
  • No Foreign Transaction Fees.
  • Annual Fee is $325.
  • Terms Apply.