Southwest Airlines announced (19-Aug-2020) it continues to experience significant negative impacts to passenger demand and bookings in 3Q2020, due to COVID-19. While the company is experiencing a modest improvement in close in leisure passenger demand, its year-on-year revenue declines remain significant and demand and booking trends remain inconsistent. For Jul-2020, the company recorded an average core cash burn of approximately USD17 million per day, operating revenues down 70% to 75%, capacity down approximately 31% and load factors of about 43%. Southwest estimates the following guidance for upcoming months:
- Aug-2020:
- Operating revenues: Down 70% to 75% year-on-year;
- Capacity: Down 27%;
- Load factor: 40% to 45%;
- Sep-2020:
- Operating revenues: Down 65% to 75%;
- Capacity: Down 40%;
- Load factor: 40% to 50%;
- 3Q2020:
- Capacity: Down 30% to 35%;
- Operating expenses (excluding fuel and oil expense, special items and profitsharing): Down 10% to 20%;
- Average core cash burn: USD20 million per day;
- Economic fuel costs: Between USD1.20 to USD1.30 per gallon, including USD24 million in premium expense and no cash settlements from fuel derivative contracts;
- Oct-2020:
- Capacity: Down 40% to 50%. [more - original PR]