A Southwest Airlines Boeing 737-7H4 takes off
Dallas-based Southwest said it expected second-quarter revenue to be up 12 to 15 per cent © AP

Airline shares rallied as investors were encouraged by optimism around summer travel after US carriers Southwest Airlines and JetBlue Airways raised their guidance for the second quarter.

Shares in Southwest were up 6 per cent, while JetBlue rose 3.4 per cent on Thursday.

The rosier outlooks helped lift the sector, with shares in American Airlines and United Airlines both up 7 per cent and Delta Air Lines up nearly 6 per cent. The broader NYSE Arca Airline index advanced 5.3 per cent.

Dallas-based Southwest said it expected second-quarter revenue to be up 12 to 15 per cent over the same period in 2019, before the pandemic hit, compared with its previous estimate of 8 to 12 per cent.

Bookings on JetBlue were “exceeding company expectations”, the airline said, leading the New York-based carrier to predict revenue for the current three-month period to be at or above the high end of its previous guidance of 11 to 16 per cent compared with the second quarter of 2019.

American’s chief commercial officer Vasu Raja told a conference on Thursday that the company would wait to see what happens with air travel over the Memorial day long weekend, which he said would be the “first true indication of what the summer might look like”, but added that the carrier is “encouraged by what we see”.

Despite the upbeat comments, US carriers continue to struggle with capacity constraints as air travel demand surges.

Earlier in the day, Delta trimmed its summer schedule by 2 per cent, or 100 daily departures, mostly in the US and Latin America, following similar announcements by rivals earlier this year.

“This will build additional resilience in our system and improve operational reliability for our customers and employees”, the Atlanta-based carrier said in a statement. The cuts will affect the flight roster from July 1 to August 7.

Source link

By admin