The red ink piled up for Southwest Airlines (NYSE:LUV) in its most recent financial quarter.
The carrier posted a $915-million net loss for the second quarter and warned travel demand will likely remain depressed until there’s a vaccine or treatment for the coronavirus.
This morning’s news release revealed revenue dropped nearly 83% in the quarter from a year earlier to a little over $1 billion, higher than analyst estimates.
Airline executives have been warning that a spike in COVID-19 cases coupled with travel restrictions in states like New York have hurt travel demand that began recovering in late spring.
Beginning in early May 2020, the Company saw a modest improvement in passenger demand, bookings, and trip cancellation trends, resulting in net positive bookings where new passenger bookings outpaced trip cancellations.
This represented a reversal in the net negative booking trends experienced during the majority of March and April 2020, when trip cancellations outpaced new passenger bookings. The Company continued to experience net positive bookings for the remainder of second quarter 2020 and July to date.
CEO Gary Kelly was quoted in the same release as saying, “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.
“We expect air travel demand to remain depressed until a vaccine or therapeutics are available to combat the infection and spread of COVID-19.”
Kelly went on to say Southwest would “aggressively and frequently” adjust its flight schedule in “this volatile demand environment.
Shares in Southwest dwindled 96 cents, or 2.9%, to $32.34.
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