Southwest Airlines Records Its First Annual Loss Since 1972
Southwest Airlines Co has recorded an annual loss of $3.1 billion, which is its first annual loss since 1972, and said that it is facing stalled demand in January and February driven by high levels of COVID-19 cases and hospitalisations.
Airlines are hoping that COVID-19 vaccine distribution will help to lift demand, but so far the US vaccine roll-out has been patchy, and there are concerns that new variants of the virus could further spread the infection, threatening a speedy recovery.
"While vaccine availability should mark the beginning of the end of this pandemic, current passenger booking trends do not indicate significant improvement through March 2021," Southwest CEO Gary Kelly said.
The airline forecast first quarter average core cash burn of approximately $17 million per day, which is higher than the $12 million per day that it recorded in the fourth quarter.
The US airline plans to return Boeing's 737 MAX to service on March 11 and expects to receive 35 737 MAX 8 deliveries through 2021, seven of which were delivered in December.
The Dallas-based company recorded a net loss of $908 million, or $1.54 per share, in the fourth quarter that ended on December 31, 2020, compared with a profit of $514 million, or 98 cents per share, a year earlier.
On an adjusted basis, the company lost $1.29 per share. Total operating revenue plunged 64.9% to $2.01 billion.
Southwest ended 2020 with liquidity of $14.3 billion.