Southwest Airlines expects to lose $100 million in revenue in the third quarter because of the recent spate of hurricanes, and has downgraded its unit revenue and cost guidance for the September quarter.
In a filing with the US Securities and Exchange Commission (SEC), Southwest said it has canceled approximately 5,000 flights during the current quarter because of “impacts from the natural disasters.”
Dallas-based Southwest has exposure to Texas, Florida and the Caribbean, which have all been affected by severe hurricanes in recent weeks. In particular, Southwest has major operations at Houston Hobby Airport, where all of the airline’s flights were canceled for nearly a week in late August/early September because of flooding in the aftermath of Hurricane Harvey.
Southwest said its third-quarter RASM, which it had previously projected to grow 1% year-over-year (YOY), is now expected to be flat to down 1% YOY in the quarter. The airline added that its third-quarter CASM is now expected to be up 3%-4% YOY, a higher unit cost rise than the 2%-3% increase previously projected.