Southwest Airlines sees first-quarter revenue hit from coronavirus outbreak

(Reuters) – Southwest Airlines Co (N:) said on Thursday it expected a hit of up to $300 million to its first-quarter operating revenue from the coronavirus outbreak, prompting it to cut its quarterly revenue outlook.

Shares of the company fell about 3% premarket, with those of bigger rivals United Airlines Holdings Inc (O:), American Airlines Group Inc (O:) and Delta Airline Holdings (N:) falling about the same.

Southwest said it has seen a significant rise in ticket cancellations and decline in traffic due to the epidemic, which has killed over 3,000 people and caused airlines across the world to cut flights and implement cost controls.

United Airlines on Wednesday suspended its full-year forecast over the outbreak and said it would cut 20% of international flights and 10% of U.S. flights in April as it launched a hiring freeze, voluntary unpaid leaves and delayed salary increases for executives.

Concerns over the still largely unknown impact of the virus led top executives from Southwest, United Airlines, American Airlines and JetBlue Airways Corp (O:) to meet with U.S. President Donald Trump on Wednesday.

Trump said the executives did not ask for any financial assistance to make up for the hit to their businesses.

Southwest said it now expects first-quarter total revenue per available seat mile – a closely followed measure of airline performance – to be down 2% to up 1%, compared with a 3.5% to 5.5% growth it forecast earlier.

It said it expected operating revenue to take a $200 million to $300 million hit. The company’s total operating revenue for the first quarter last year was $5.15 billion.

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