Southwest Airlines Co (LUV.N) on Thursday reported a smaller quarterly loss and said it would remain profitable for the rest of the year, as leisure bookings rebound thanks to aggressive vaccination drives.
The U.S. budget carrier has been one of the biggest beneficiaries of the easing of coronavirus curbs as it mainly caters to the domestic market, unlike larger rivals who fly transatlantic routes and are struggling due to international border restrictions.
That has propelled Southwest’s market value to more than $31 billion as of Wednesday’s close, above Delta Air Lines (DAL.N), whose value has fallen by about a third to $26.6 billion from two years ago.
Delta last week posted a smaller quarterly adjusted loss and also said it expects to remain profitable for the rest of 2021.
Southwest said it stopped burning cash in June, with an average core cash flow of about $4 million per day for the month. Its average core cash burn was about $1 million per day in the second quarter, down from about $13 million per day in the first quarter.
June leisure passenger traffic rose above June 2019 levels while passenger fares were on par with the same period two years ago, Chief Executive Officer Gary Kelly said, adding that the company expected to see further improvement in July.
Southwest said it now expects July operating revenue to drop between 10% and 15% compared with the same period in 2019, an improvement from its prior forecast of a fall between 15% and 20%.
The company expects August operating revenue to decline between 12% and 17% from two years earlier.
Excluding items, Dallas-based Southwest’s net loss narrowed to $206 million, or 35 cents per share, in the second quarter, from $1.50 billion, or $2.67 per share, a year earlier.
Total operating revenue rose nearly 300% to $4 billion from a year earlier, but fell about 32% from 2019.