A Southwest Airlines jet leaves Midway Airport in Chicago, Illinois.
Scott Olson | Getty Images
American Airlines posted its fifth straight quarter loss on Thursday while Southwest Airlines posted a profit that was boosted by federal payroll support.
Both airlines have seen an improvement in travel bookings and plan to increase flying during the peak spring and summer months as more people are vaccinated against Covid-19 and tourist attractions reopen.
American plans to operate capacity in the second quarter that is 20 to 25% less compared to the same quarter of 2019, while Southwest will fly only slightly less in June of this year than in the same month of 2019 and by 15% in the second quarter less quarter over 2019.
American stocks fell 1.2% and Southwest’s shares fell 0.5% in morning trading.
American Airlines recorded a net loss of $ 1.25 billion. The Fort Worth, Texas-based airline, like its major competitors Delta and United, has had to forego much of the business that airlines with international travel revenues have long relied on. American CEO Doug Parker said the demand for business travel is gradually improving but is still well below pre-pandemic levels.
American revenue for the first quarter was just over $ 4 billion, a decrease of nearly 53% from more than $ 8.5 billion a year ago and below analyst expectations. After adjusting for one-time effects, American had a loss per share of $ 4.32, a penny more than analysts estimated.
“The pandemic is far from over. We must keep fighting like never before and make sure that the American is at the forefront when the green flag falls,” said Parker and President Robert Isom in a statement to staff. “As our world advances every day in the COVID-19 vaccination effort, customers return again on travel and there is no doubt the pace of recovery is accelerating.”
Better demand will help both airlines reduce their cash usage. American had an average daily cash burn of $ 27 million in the first quarter, which fell to $ 4 million in March. Southwest, meanwhile, expects to see balanced core cash flow “or better” by June.
The Dallas-based airline posted net income of $ 116 million for the first quarter, compared to a loss of $ 94 million a year earlier. The first quarter profit came from more than $ 1 billion in federal aid that offset labor costs.
Southwest’s revenue fell to $ 2.05 billion, a decline of more than 51% year over year and slightly below Wall Street analysts’ expectations of $ 2.07 billion. Southwest posted adjusted loss per share of $ 1.72, lower than analysts’ forecast of $ 1.85 per share.