Southwest posts $915 million loss, warns travel demand will remain weak without coronavirus vaccine

Earnings

Southwest airline planes sit on the tarmac at Fort Lauderdale–Hollywood International Airport on February 20, 2019 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

Southwest Airlines on Thursday 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.

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.

“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,” CEO Gary Kelly said in an earnings release. “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 said Southwest would “aggressively and frequently” adjust its flight schedule in “this volatile demand environment.’

Shares were up 1.5% in premarket trading.

This is breaking news. Check back for updates.

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