There was neither a press conference nor a conference call. There was no press release or CEO interview.
Instead, it was a brief regulatory filing with the Securities and Exchange Commission. On Wednesday, Southwest Airlines warned investors that fewer people would buy plane tickets to travel soon. In the coming weeks, more and more people have canceled trips in their calendars.
The airline believes the slowdown is “being driven by the recent surge in COVID-19 cases related to the Delta variant”. A week earlier, Frontier Airlines blamed the Delta variant for a similar slowdown in ticket sales.
Anyone traveling by plane this summer knows how busy the airlines have been. Airmen have been pushing their way back on planes so quickly that some airlines have struggled to find enough equipment and people to handle the demand.
Southwest returned to profitability in July but warned that the rapidly spreading delta variant of SARS-CoV-2, the virus that causes COVID-19, will “make it harder” to go into the black in August and September write. The news did not harm shareholders when it was published. Southwest’s stock price traded higher the same day the Delta thing was announced.
Still, the disclosures are tacit acknowledgments and strong reminders that the economy is still dependent on the virus.
Last month, throughout the pandemic, Federal Reserve Chairman Jerome Powell observed that “successive waves” of the virus tended to be “less economical” in effects. He stated that the vaccine has changed people’s attitudes and “we have learned to live with the germ”.
So far, during the delta breakout, the stock market was convinced that this option would have no significant economic or business impact. Infections and hospital stays continue to increase. The schools start again. Travel plans change. And the forecasts for economic growth have been lowered. In the week ahead, investors will listen as more companies become cautious as this strain of coronavirus continues to spread.
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