Southwest posted its first quarterly loss since 2011 as air travel demand plummets. CEO Gary Kelly discussed yesterday the impact of the coronavirus pandemic, and what it will take for demand to return.
and severe measures to stop it from spreading like shelter-in-place orders. Airlines including Southwest recently won a portion of $25 billion in government grants and loans that prohibit them from laying off or cutting the pay rates of workers through Sept. 30, thoughCEO Gary Kelly told CNBC that if demand doesn't come back by that time the airline will have no choice but to downsize.
Kelly said travelers will return to the skies when they feel safe, a sentiment shared by other airline CEOs. Airlines are starting to offer travelers face masks to avoid the spread of the coronavirus, whileon Wednesday said it would mandate them for passengers. Some airlines are blocking middle seats, but Kelly said the airline is leaning more toward underselling the flight in case travelers want to sit with their party, one of them in the middle seat.
The Dallas-based airline had a loss of $94 million in the quarter on revenue of $4.23 billion, an 18% decline in sales compared with a year earlier, and slightly weaker than analyst estimates. In the same quarter of 2019 it had a profit of $387 million. Its adjusted per-share loss came in at 15 cents, ahead of expectations. Southwest shares were up close to 4% in afternoon trading, less than its competitors.
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