Some of America’s major airlines like Southwest and Frontier Airlines have started to brace for the economic impact of the Delta Covid variant. The number of cases of this variant, considered to be the most dangerous among all variants, is on the rise in the country. Southwest Airlines, the largest domestic airline of America, has already said that its August revenue will be down 15 percent to 20 percent. This downfall in revenue was earlier estimated at 12 percent to 17 percent. The company said that it had to revise the forecast in view of rising cases of COVID-19. It predicted that the revenue of the third quarter would be down by around 15 to 20 percent in comparison to the same quarter of 2019.
The company said it recently experienced a reduction in the rate of close-in bookings and an increase in close-in trip cancellations in the month of August. In a filing with the Securities and Exchange Commission, the company said that the trends are encouraged by the recent rise in cases of Delta Covid Variant. It must be noted that the airline had turned a profit in July. But in the current scenario, it is highly unlikely that the company would have a profitable third quarter. The announcement by the airlines comes just days after Denver-based Frontier Airlines said that it could have a slight loss of net income in the recent quarter. Frontier Airlines was profitable in the second quarter.
“We have witnessed that the level of bookings has softened in the last week. We believe that it is only because of the increase in the Covid cases. However, it is very difficult to predict how much impact Delta variant would have on the aviation industry and what will be the duration of the impact,” the company said. However, the airline is confident of a rebound in the booking as Covid-19 cases begin to decline. But there are no signs of slowing down of new cases. In the past two weeks, the number of new cases has increased by 86 percent. While the number of deaths has increased more than 100 percent, hospitalizations are up by 86 percent.
