Southwest Airlines Co said on Thursday an improvement in revenue seen in the past few months was losing steam in recent weeks amid surging COVID-19 cases in the United States, sending the U.S. budget carrier’s shares down 2% in premarket trade.
“While the company expected the election to impact trends, it is unclear whether the softness in booking trends is also a direct result of the recent rise in COVID-19 cases,” Southwest said.
“As such, the company remains cautious in this uncertain revenue environment.”
The COVID-19 pandemic brought travel to a near halt earlier in the year, forcing airlines to suspend operations and seek government aid.
While the easing of coronavirus-induced lockdowns has led to an improvement in leisure travel within the United States, business travel remains muted as border restrictions are still in place in several countries.
Southwest said it continues to expect its November operating revenue to be between 60% and 65% compared to a year earlier, and forecast December operating revenue to drop to that range as well.
The company said its October operating revenue fell 65%, compared to its expectations of a 65% to 70% drop.
Southwest estimates its January 2021 capacity to decrease in the range of 35% to 40%, year-over-year, compared to an expected 40% fall in the current quarter.
Up to Wednesday’s close the company’s stock had fallen about 20% this year.