Since its launch with a $3.1 billion loss, Southwest Airlines finished the most challenging year, even after taking billions in government grants and deeply cutting expenses to confront the devastating COVID-19 pandemic, Report states, citing foreign press.
Gary Kelly, CEO of the Dallas-based carrier, said Southwest is still losing $17 million a day, and that revenue will need to double from current levels to hit break-even.
“While we hope to achieve cash burn break even in 2021, it is wholly dependent upon a substantial rebound in passenger traffic and revenue; and, it is difficult to predict the timing of such a rebound, especially concerning business travel,” Kelly said in a statement.
He said it was the first annual net loss for the company since 1972.
Southwest is still clearly in belt-tightening mode, even after getting another $1.7 billion in government stimulus aid this month. Southwest said Tuesday that it would offer another round of partial pay, voluntary leave to employees as the company continues to be overstaffed.
The early weeks of 2021 aren’t providing any relief to the financially battered airline industry. Southwest said its core cash burn would be about $5 million a day higher than the $12 million it lost in the fourth quarter because of “softness in demand and a seasonally weaker travel period.”