With Delta COVID-19 Variant Running Rampant, Airline Comeback Turns Sour

The threat of a potential third wave of the COVID-19 pandemic is forcing airlines to reconsider their recovery path for the rest of 2021. Both Southwest Airlines and Frontier Airlines are now telling investors to curb their enthusiasm as revenue could likely be down for the third quarter.

Another wave of the COVID-19 pandemic could stall the aviation sector recovery even as more passengers are passing through Transportation Security Administration checkpoints. CNBC reports Frontier Airlines and Southwest Airlines are warning investors that profits may not be as high as anticipated for the rest of this year.

COVID-19 Delta Variant Could Bring Profitability Down, Cancellations Up

The latest numbers from the Johns Hopkins Coronavirus Resource Center suggests America is seeing a third peak of the COVID-19 virus due to the Delta Variant. Over 36 million Americans – or 11 percent of the U.S. population – have contracted a confirmed case of COVID-19, accounting for over 618,000 deaths.

As a result, airlines are not as bullish on their goals. Southwest is now telling investors that September 2021 revenue could be down as much as 25 percent compared to 2019, while Frontier says their “best case scenario” is to break even for the third quarter.

“The Company has recently experienced a deceleration in close-in bookings and an increase in close-in trip cancellations in August 2021,” Southwest said in a SEC filing. Which are believed to be driven by the recent rise in COVID-19 cases associated with the Delta variant.”

Complicating issues are staffing issues for the carriers, and policies around COVID-19 vaccines. According to guidance seen by CNBC, the Southwest Airlines Pilots Association is warning their workers that “without a schedule reduction, operational woes will continue.” It goes on to say that the carrier’s network operations team is also accounting for the staffing issues.

As far as vaccinations, the two leisure carriers are split on their policies. While Frontier joined United Airlines in requiring workers to get inoculated against the novel Coronavirus, Southwest has not yet made the shot a requirement for employment.

Concerns Come After Spirit Airlines Network Meltdown

The concerns about cancellations and delays come after a domino effect inside Spirit Airlines caused a total network meltdown over the week of Aug. 2, 2021. The low-cost carrier was forced to cancel over 1,000 flights, leaving flyers stranded without recourse.