Southwest Airlines on Thursday reported the biggest loss ever in the history of the company as coronavirus pandemic continues hitting the Airline industry hard.
The Dallas-based company blamed its $1.2 billion Third Quarter 2020 net loss on the covid-19 that has forced travelers to stay off plane – a situation not likely to change any time soon.
“The pandemic persists along with the negative effects on air travel demand, resulting in our third quarter net loss of approximately $1.2 billion”, Gary C. Kelly, Chairman of the Board and Chief Executive Officer, said.
“We will continue to monitor demand and prudently adjust our available seat miles (ASMs, or capacity), while pursuing further revenue and cost opportunities”, he added.
But Southwest didn’t end the Third Quarter as deep in the red as many analysts thought. The company’s net loss of $1.96 per share and revenues of $1.8 billion beat Wallstreet’s expectations for a $2.57-per-share loss and about $1.7 billion in revenues, according to Bloomberg data.
“We remain diligent in managing our cash burn. Since March, we have reduced annual 2020 cash outlays and spending by approximately $8 billion compared with original plans”, the CEO said.
Southwest’s average core cash burn for the quarter improved from $23 million a day in the prior quarter to roughly $16 million a day, a number the company expects to fall to about $11 million in the final three months of the year.
Southwest shares climbed as much as 5.3 percent to $41.98 Thursday before paring the gain to 4.8 percent as of 1:51 p.m.
Southwest plans to start filling middle seats on its planes again in December after keeping them empty for months as a social-distancing precaution.
According to them, the change is being made based on scientific research showing the risk of breathing in COVID-19 particles on an airplane is “virtually non-existent.”