FILE PHOTO: A Southwest Airlines Co. Boeing 737 MAX 8 aircraft sits at Midway International Airport in Chicago, Illinois, U.S., March 13, 2019. REUTERS/Kamil Kraczynski
September 16, 2020
By Tracy Rucinski and Rachit Vats
(Reuters) – Southwest Airlines Co <LUV.N> said on Wednesday it will continue to limit the number of seats sold on each flight, allowing middle seats to remain open through November, and expects its daily cash burn to slow in the third quarter as bookings improve.
Southwest, which was previously blocking middle seats through October, said bookings had picked up in August and September from a low point in July but remain primarily leisure-oriented and inconsistent by region.
The U.S. airline said it sees a daily cash burn of $17 million in the third quarter versus an estimated $20 million previously and continues to plan for multiple demand scenarios in terms of fleet and capacity.
Southwest still plans to cut its third-quarter schedule by 30% to 35% from last year.
The airline, which has one of the strongest financial positions among U.S. peers, said it does not currently plan to utilize its loyalty program should it need to secure additional financing.
U.S. majors Delta Air Lines <DAL.N>, United Airlines <UAL.O> and American Airlines <AAL.O> have all pledged their loyalty programs for financing.
Southwest had cash and short-term investments of about $14.8 billion as of Sept. 15.
The budget carrier said operating revenue could decline as much as 75% in October, deeper than an estimated 65% to 75% decline in September.
(Reporting by Rachit Vats in Bengaluru and Tracy Rucinski in Chicago; Editing by Shailesh Kuber and Nick Zieminski)