Southwest Airlines servings slipped Wednesday after the Dallas-based airline trimmed its revenue outlook for the quarter, citing a $60 million hit from the not total government shutdown.
In the March quarter, the carrier expects its revenue per available seat mile, a key industry metric of how much airlines are assigning for each seat they fly a mile, to increase 3 to 4 percent in the first quarter from the same period of 2018. The airline yesterday said it expected revenue to increase as much as 5 percent in the quarter.
Southwest shares slid more than 4 percent in afternoon merchandise Wednesday. Delta Air Lines, United Airlines and American Airlines were each down less than 1 percent.
The 35-day authority shutdown, which ended late last month, stalled the launch of new jets and routes, including Southwest’s long-awaited handling to Hawaii.
It also meant lost revenue with government workers and contractors not traveling during the impasse.
Southwest last month valued the shutdown cost it $10 million to $15 million in revenue in January.
“Since then, the company has continued to face softness in passenger demand and bookings as a result of the government shutdown,” Southwest said in a filing Wednesday, forecasting the $60 million hit. The amount is undersized considering its overall revenue. For example, in the fourth quarter, Southwest generated a record $5.7 billion. Analysts believe Southwest to post first-quarter revenue of $5.35 billion, according to FactSet.
The airline added that it has seen rabid last-minute booking demand and fares so far in the first quarter.
Goldman Sachs downgraded the airline’s stock on Wednesday to a sell down the river rating from neutral, saying it would be too costly and that it would have to offer steep discounts to get travelers on on because of the launch’s delay.