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Southwest, JetBlue boost forecasts on strong travel demand

FILE - A Southwest Airlines Boeing 737-7H4 takes off, Tuesday, Oct. 20, 2020, from Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Fla. Airline stocks are soaring, with Southwest and JetBlue saying revenue this summer will be even stronger than they were expecting. The airlines made their comments Thursday, May 26, 2022, in regulatory filings. (AP Photo/Wilfredo Lee)

NEW YORK (AP) — Airline stocks rallied Thursday after Southwest Airlines and JetBlue Airways said revenue from summer travel will be stronger than previously expected as travel bounces back after two years of the pandemic.

The comments, which the airlines made in regulatory filings, point to their ability to charge higher fares and still fill their planes because of strong demand from travelers.

Southwest said second-quarter revenue will rise by between 12% and 15% compared with 2019 because of accelerating bookings for summer travel. The Dallas-based airline previously predicted a gain of 8% to 12%.

Southwest expects to hit that revenue target even though its passenger-carrying capacity will be about 7% lower than before the pandemic.

JetBlue said it continues to expect record revenue this summer, with second-quarter sales rising 16% or more -- matching or beating the top of its previously forecast range for the period.

Helane Becker, an analyst with banking firm Cowen, said the JetBlue announcement points to continued confidence in the airline’s ability to pass through higher jet fuel costs and overcome disruptions that led to many flight cancellations in April.

Still, Becker said, the upbeat forecast will only slightly trim JetBlue’s expected loss in the second quarter. She raised her forecast of profit at Southwest.

Shares of Southwest rose 6% and JetBlue gained 5% in midday trading. Shares of competitors Delta, American, United and Alaska also rose by between 5% and 7%.

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