Southwest Airlines expects demand will 'remain depressed' until creation of COVID-19 vaccine

Southwest Airlines announced (23-Jul-2020) a net loss of USD915 million in 2Q2020, driven by "weak" demand for travel caused by the COVID-19 pandemic. Southwest Airlines chairman and CEO Gary Kelly stated: "We were encouraged by improvements in May and June leisure passenger traffic trends, compared with March and April; however, the improving trends in revenue and bookings have recently stalled in July with the rise in COVID-19 cases". Modest improvement in passenger demand, bookings and trip cancellation trends began in early May-2020, with net positive bookings outpacing trip cancellations, in comparison to Mar/Apr-2020 when trip cancellations outpaced new bookings. The company continued to experience net positive bookings for the remainder of 2Q2020 and into Jul-2020. For Jul-2020, bookings have softened and trip cancellations have increased modestly. Revenues are estimated to decrease in the range of 70% to 75% year-on-year in Jul-2020, and capacity is forecast to fall approximately 30%, while load factor is expected to sit in the range of 40% to 45%. Revenues for Aug-2020 are estimated to decrease between 70% to 80% and capacity is forecast to fall about 20%, while load factor is expected to be between 30% to 40%. Mr Kelly expects demand will "remain depressed until a vaccine or therapeutics are available", adding: "We will adjust our flight schedule aggressively and frequently in response to this volatile demand environment". [more - original PR]