Southwest Airlines just posted its first quarterly loss in nearly a decade.
The Dallas based airline said revenue was down 17% in the first three months of 2020 resulting in a net loss of $94 million.
It was less exposed than rivals such as Delta and United Airlines as it doesn’t fly long haul to Asia or Europe where flight cancellations began, but it expects more financial pain in the coming months.
"In late February we began experiencing a precipitous drop in passenger demand and bookings due to the novel coronavirus Covid-19 pandemic," said CEO Gary Kelly.
"The U.S. economy has been at a standstill, and the current outlook for second quarter 2020 indicates no material improvement in air travel trends," Kelly said.
Kelly said customer cancellation requests are at ‘unprecedented levels’ although they are down from a peak in March.
To strengthen its coffers Southwest is getting $3.3 billion under the Payroll Support Program including $948 million in an unsecured 10-year term loan.
It has parked nearly half of its fleet of Boeing 737 jets.
The airline said just 6% of seats were filled in April and doesn’t expect more than 10% in May.
Kelly has already warned the airline will be ‘drastically smaller’ if air travel demand doesn’t rebound by the summer.
