Spike in COVID-19 cases is starting to hurt air travel
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
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.
For more TPG news delivered each morning to your inbox, sign up for our daily newsletter.
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.
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.
Featured photo by Zach Griff/The Points Guy.
Sign-up Successful!
Welcome to The Points Guy!
Earn 50,000 bonus miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new card in the first three months of card membership. Plus, earn up to $100 back in statement credits for eligible purchases at U.S. restaurants in the first three months of card membership.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Earn 50,000 Bonus Miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new Card in your first 3 months.
- Plus, earn up to $100 back in statement credits for eligible purchases at U.S. restaurants with your card within the first 3 months of membership.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees
Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.
Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.