Southwest Airline may take $100mn hit from hurricanes, earthquakes

epa03098371 Manager Biljana Obrenic helps prepare the new Southwest Airlines terminal ticket counter at Hartsfield-Jackson Atlanta International Airport in Atlanta, Georgia, USA, 09 February 2012. Southwest Airlines, which recently bought AirTran Airways, begins service out of Atlanta on 12 February and will provide competition in Delta Air Lines' hometown.  EPA/ERIK S. LESSER

Bloomberg

Southwest Airlines Co. said third-quarter sales will take a $100 million blow from this year’s devastating hurricanes and earthquakes. About 5,000 flights had been canceled through Wednesday because of the natural disasters, the carrier said in a statement.
Southwest also pared its outlook for revenue from each seat flown a mile, saying the benchmark
gauge would be little changed in the third quarter even in a
best-case scenario. Previously, it said the figure would potentially increase “slightly.”
The natural disasters are compounding other problems that have weakened the financial outlook at US airlines recently, including fare battles, higher fuel costs and feeble demand for pricey, last-minute tickets. Delta Air Lines Inc., United Continental Holdings Inc. and American Airlines Group Inc. all lowered their revenue estimates earlier in September.
Southwest said costs for each available seat flown a mile will increase 3 percent to 4 percent in the current quarter from a year earlier. Previously, the Dallas-based carrier had projected that costs would rise no more than 3 percent.
The shares rose less than 1 percent at 9:54 am in New York. Southwest advanced 12 percent, the biggest gain on a Standard & Poor’s index of the five biggest US airlines.
Flights to Puerto Rico are still limited after the island was battered by Hurricane Maria.
Earlier this month, Hurricane Irma pounded Florida and the Caribbean, while two earthquakes in Mexico took more than 400 lives.
United suspended operations at its Houston hub for four days earlier in the quarter and scrubbed more than 7,400 flights because of Hurricane Harvey, the company disclosed earlier this month.

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