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Southwest Airlines Forecasts Slower Cash Burn As February Ticket Sales Improve

By Dave Simpson

Southwest Airlines has forecast slower cash burn in the current quarter as leisure bookings and demand improve in February.

The US budget carrier said that it expects its average core cash burn to be approximately $15 million a day in the first quarter, compared with the $17 million that it estimated previously.

Southwest, however, said that business travel demand and bookings remain depressed.

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US airlines expect demand to improve this year as vaccines become more widely distributed but have warned that the strength of any rebound will depend on the pace of vaccine rollouts and the easing of travel restrictions.

So far, the US vaccine roll-out has been patchy, and many European countries are discouraging travel and implementing more travel curbs to contain the spread of new infections.

Late last month, Southwest recorded an annual loss of $3.1 billion, which was its first such loss since 1972, and said that it was facing stalled demand in January and February, driven by high levels of COVID-19 cases and hospitalisations.

Despite strong cost-cutting efforts in place, airlines continue to burn millions of dollars of cash every day.

Plans To Fly Boeing's 737 MAX

Southwest has also confirmed plans to fly Boeing Co's 737 MAX, which was approved to fly commercially again in November after a 20-month safety ban, from March 11.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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Enjoy full access to Hospitality Ireland, our weekly email news digest, all website and app content, and every digital issue.
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