Ground operations employees load baggage onto a Southwest Airlines Boeing 737 aircraft on the tarmac at John Wayne Airport (SNA) in Santa Ana, California.
Patrick T. Fallon | Bloomberg | Getty Images
Southwest Airlines rose more than 4% in premarket trading Tuesday after the low-cost carrier said new bookings are outpacing cancellations, a turning point in the pandemic that had devastated air travel demand.
The Dallas-based carrier said its May operating revenue will likely be down no more than 90% year over year, compared with a previous estimate for a decline as much as 95% compared with May 2019. Southwest said it’s seeing a “modest improvement” in demand and bookings in June 2020 and that it expects operating revenues next month to be 80% to 85% lower than a year ago.
The carrier is set to cut capacity by up to 55% next month from June 2019 and said, even with that reduction, it expects planes will be no more than 45% full.
“The revenue environment remains uncertain and may require additional capacity reductions depending on passenger demand,” it said in a filing.
United, for its part, said Tuesday that it has logged “a moderate improvement in demand” for trips within the United States and some international destinations the rest of the second quarter. The airline is cutting capacity by 75% in July from a year ago, compared with a 90% year-over-year reduction planned for May and June.
United “plans to continue to proactively evaluate and cancel flights on a rolling 60-day basis until it sees signs of a recovery in demand.”
It is also planning to more than halve its capital spending expenditures to around $2 billion next year. United’s shares were up more than 5% in premarket trading.