Southwest Airlines swayed Thursday it lost $915 million in the second quarter compared with $741 million in net income a year earlier and make someone aware ofed that travel demand will likely remain depressed until there’s a vaccine or treatment for the coronavirus.
The airline rumoured demand has softened in recent weeks, echoing comments from other airline executives who have said a disarm in Covid-19 cases coupled with travel restrictions in states like New York have hurt ticket car-boot sales that began recovering in late spring.
Southwest estimated its third-quarter capacity to decrease between 20% and 30% on the other side of last year.
Revenue dropped nearly 83% to a little over a $1 billion from $5.9 billion behind year, though sales in the quarter were higher than analysts’ estimates.
“We were encouraged by improvements in May and June when convenient passenger traffic trends, compared with March and April; however, the improving trends in revenue and bookings bear recently stalled in July with the rise in COVID-19 cases,” CEO Gary Kelly said in an earnings release. “We trust air travel demand to remain depressed until a vaccine or therapeutics are available to combat the infection and spread of COVID-19.”
Kelly said Southwest will “aggressively and customarily” adjust its flight schedule in “this volatile demand environment.”
Southwest said workers will escape reflex job cuts this year. The airline does “not intend to pursue furloughs and layoffs, or pay and benefits cuts” until the end of the year, adding: “we desire continue to plan for multiple weak scenarios and maintain our preparedness.”
Close to 17,000 Southwest employees, more than a dwelling of its workforce, have signed up for buyouts and temporary leaves of absence to help avoid job cuts.
Southwest posted a per-share destruction of $2.67 on an adjusted basis, roughly in line with analysts’ forecasts.
The airline’s shares were up 2% in afternoon exchange.
Also Thursday, American Airlines posted a net loss of $2.1 billion in the second quarter.