Dallas-based Southwest Airlines, one of the keys to restoring pre-pandemic visitation levels to the Southern Nevada tourism market, continued to endure its coronavirus-induced slump in the third quarter.
The airline, the busiest commercial airline serving McCarran International Airport, on Thursday reported a $1.411 billion loss on $1.793 billion in revenue for the quarter that ended Sept. 30.
The loss was greater than the $915 million lost in the second quarter, but revenue was higher than the second quarter’s $1.008 billion.
Also Thursday, American Airlines reported a loss of $2.4 billion as revenue fell 73 percent to $3.17 billion. Combined with earlier losses reported by Delta Air Lines and United Airlines, the four largest U.S. airlines have lost at least $10 billion in each of the last two quarters.
Southwest is operating its flights at about two-thirds capacity as a way of keeping customers comfortable and safe. The company has said it would keep its reduced-capacity policy in place through at least the end of November.
Southwest also is spending more to thoroughly clean its aircraft.
“Our top priority remains, and always will be, the safety of our employees and customers,” Gary Kelly, Southwest’s chairman and CEO, said in a statement issued Thursday.
“We are dedicated to the Southwest Promise, first launched in May in response to the COVID-19 pandemic,” Kelly said. “The Southwest Promise encompasses our multi-layered approach to supporting the well-being of our employees and customers: additional cleaning throughout the customer journey; procedures to support distancing at the airport and onboard aircraft; a requirement that passengers and customer-facing employees wear face masks or face coverings; a sophisticated air distribution system that results in an exchange of cabin air every two to three minutes; and HEPA filters that remove 99.97 percent of airborne particles, similar to technology found in hospitals.”
Southwest has managed to maintain an investment-grade credit rating while reducing cash burn to $12 million a day in September.
The company has begun negotiations with its unions to seek concessions that would enable it to survive any further downturns. The company would implement concessions Jan. 1 in exchange for no layoffs or furloughs through 2021. If an agreement can’t be reached, the company is prepared, as a last resort, to furlough employees next year.
Southwest also has been expanding its route map during the downturn in business. Some of the new destinations on the horizon include Miami International Airport and Palm Springs International Airport in California on Nov. 15; seasonal service to Colorado ski country at Montrose Regional Airport (Telluride and Crested Butte) and Yampa Valley Regional Airport (Steamboat Springs) on Dec. 19; Chicago’s O’Hare International Airport and George Bush Intercontinental Airport in Houston in the first half of 2021.
On Thursday, Southwest expanded the list.
In the first half of 2021, the airline will add to its route map Colorado Springs Municipal Airport in Colorado Springs, Colorado; Savannah-Hilton Head International Airport in Georgia; and a return to Jackson-Medger Wiley Evers International Airport in Jackson, Mississippi.
Southwest Airlines stock closed up $2.09, 5.2 percent, to $41.93 a share in slightly-above-average volume trading on the New York Stock Exchange. It dipped slightly, 3 cents, or 0.08 percent after hours to end at $41.88 a share.
Southwest Airlines Co.
Third-quarter revenue and earnings for Dallas-based Southwest Airlines Co., the busiest commercial air carrier at McCarran International Airport. (NYSE: LUV)
Q3 2020: $1.793 billion
Q3 2019: $5.639 billion
Q3 2020: ($1.411 billion)
Q3 2019: $819 million
Earnings/(Loss) per share
Q3 2020: ($1.96)
Q3 2019: $1.23