In the first quarter this year, Southwest Airlines lost $144 million before taxes because the removal of non-essential travel intended to reduce coronavirus spread took operations to a grinding halt.
After a tax gain, or 18 cents per diluted share, the Dallas-headquartered airline shed $94 million as sales nosedived 18 percent to $4.2 billion. Market analysts polled by Refinitiv were predicting a $4.42 billion sales decline of 41 cents a share.
Southwest Airlines is losing around $30 million to $35 million every day and does not see its fleet of commercial jets to fly back up anytime soon.
The business has long been one of the most successful airlines in the industry, but coronavirus has done airlines serious harm. Since the pandemic travel has dropped to practically zero.
Southwest Airlines has also disclosed that the current quarter would deliver disastrous outcome. The company stated sales is expected to fall at least 90 percent in April and May, while cancelations of trips have dropped from their peak in March.
And it said that in April it sold only 6 percent of its seats to passengers. The latest forecast for the second quarter this year shows no significant change in patterns in air travel, Southwest said.
Southwest revealed a 55-million-share public stock offer priced at around $1.6 billion based on Monday's closing price and said it would sell $1 billion in additional debt in an attempt to shore up its finances in the midst of a bleak demand outlook.
The airline said that next month it expects its operating revenue to fall as much as 95 per cent from a year earlier but noted that it is incapable of accurately predicting trends beyond May 2020.
Southwest entered the pandemic-triggered recession with the best sales ledger of any giant airline but nevertheless took billions in loans and government assistance. It has some $9.3 billion in cash, including recent loans and the $3.2 billion that it received as part of the government's rescue program.
When April comes to an end, Southwest said, its aircraft are expected to have just 6 percent capacity. May is expected to be not any better, it said, with loads at 5 to 10 percent of total capacity.
Southwest, which only operates Boeing 737s, has 350 passenger jets in long-term storage or parked at the moment, on top of the 34 MAX planes that were grounded to comply with the Federal Aviation Administration mandate.
For Southwest Airlines, the first quarter was tough, but for just about all airlines. ts first-quarter miseries were substantially smaller compared to what its rivals United and Delta suffered.
