Southwest Needs a Strong Business Travel Return After June’s Leisure Peak
Photo Credit: Southwest Airlines operations in Denver, where a memo was sent to ground workers about the operational emergency. Southwest Airlines / Stephen M. Keller
Skift Take
For most U.S. airlines, June was the best revenue month in a very long time. But don't mistake that for a sustained recovery. The situation is dicey. It's not clear whether this recovery can continue for the final three months of the year.
While demand is strong and yields remain above pre-pandemic levels, the fare environment has cooled since June, the strongest month so far in the post-Covid recovery, Southwest Airlines executives said Thursday on the airline's second quarter earnings call.
"We're seeing through all of our external data as well as our internal data that yields peaked in June," Southwest Chief Commercial Officer Andrew Watterson told analysts. "Essentially you couldn't push leisure travelers beyond a certain fare level, it seemed like."
U.S. travelers may have had a price ceiling, but they still shelled out a lot of money for plane tickets between April and June, Southwest's results show. Southwest's revenue per available seat mile, which measures how much money an airline makes for each seat it flies one mile, increased 22 percent compared to 2019. By the same metric, costs rose 20.7 percent, much of it from higher fuel costs.
Still, Southwest could use a stronger return of business travel than it has seen so far. But the prospects fo
