American Airlines, Southwest Report Deep Losses for Q3

By Paul Riegler on 22 October 2020
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American Airlines and Southwest Airlines both announced financial results for the third quarter of 2020.

While both airlines lost billions of dollars, their reports showed slight improvement over the second quarter and were cause for cautious optimism even as the coronavirus pandemic shows no signs of releting.

American, the world’s largest airline, said it lost $2.8 billion excluding special items, a marked improvement from the $3.4 billion it lost in the Q2.

Southwest, the world’s third largest carrier by passengers carried, reported a loss of $1.2 billion, down compared to the $1.5 billion it lost in the second quarter.

Both said they would burn less cash in the coming months as leisure bookings for the holiday travel season have shown signs of recovery.

Neither airline foresees a return to pre-pandemic travel levels until the threat of the coronavirus has greatly diminished.

“Until we have widely available vaccines and achieve herd immunity, we expect passenger traffic and booking trends to remain fragile,” said Gary Kelly, Southwest’s CEO.

For its part, American said it can only count on an increase in travel to reduce cash burn and that it can’t cut costs any further

“Those numbers are getting better, primarily because more people are flying,” said Doug Parker, the airline’s CEO, referring to cash burn.  “We’ve done virtually everything we can as it relates to costs. That number will get to a positive number when more people are flying. That will happen at some point in 2021, I’m certain,” adding, however, that he didn’t know “exactly when.”

Meanwhile, Alaska Airlines, the nation’s fifth largest carrier, recorded a loss of $399 million, down from the $439 million loss it had posted in the spring.

(Photo: Accura Media Group)

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