Southwest Airlines Co. shares slid in pre-market trading after the world’s biggest discount airline said the U.S. government shutdown hit sales harder than it previously expected.
Dallas-based Southwest expects to lose $60 million in revenue in the first quarter because of the shutdown, after previously estimating a $10 million to $15 million impact for the period from Jan. 1 through Jan. 23, according to a regulatory filing Wednesday.
“The company has continued to experience softness in passenger demand and bookings as a result of the government shutdown,” it said, adding that fares are also increasing more slowly than expected.
The three biggest U.S. carriers, American Airlines Group Inc., Delta Air Lines Inc. and United Continental Holdings Inc. have also warned that the shutdown eroded sales and weighed on margins. Concerns surrounding security delays and airport snarl-ups put some passengers off flying during the closure, while some operators were also hurt by a drop in federal government customers.
Shares of Southwest slipped 2.9 percent in pre-market New York trading. The stock closed Tuesday at $57.67, giving a market value of $31.9 billion.
Southwest’s revenue per available seat mile, a measure of fares, will rise in the range of 3-4 percent in the first quarter compared with a year earlier, it said, after previously guiding for a 4-5 percent increase.