Southwest Airlines Takes First Full-Year Loss Since 1972, Posts Loss Of $3.1 Billion
DALLAS (CBSDFW.COM/AP) — It's the biggest loss for Southwest Airlines in nearly 50 years. The Dallas-based airline said Thursday it lost $3.1 billion in 2020 and bookings for early this year have stalled in the face of high numbers of new reported US cases of COVID-19.
The revenue hit is the first full-year loss for Southwest since its early days in 1972.
Southwest predicted that January revenue will fall 65% to 70% compared with the same month last year, and February revenue will fall 65% to 75%.
The Dallas-based airline posted a $908 million loss for the fourth quarter, compared with a profit of $514 million in the same quarter last year.
New U.S. cases of COVID-19 have dropped in recent weeks. Along with the rollout of new vaccines, that is giving airlines and others in the travel industry hope for improvement this summer. However, the companies are worried by new restrictions against international travel and by new variants of COVID-19.
"Travel and tourism industries face an ever-changing environment as the pandemic evolves," Southwest CEO Gary Kelly said in a statement. "While vaccine availability should mark the beginning of the end of this pandemic, current passenger booking trends do not indicate significant improvement through March."
Southwest expects to lose $10 million to $15 million a day in the first quarter after burning through about $15 million a day in the fourth quarter of 2020.
Southwest said its fourth-quarter loss, excluding non-repeating costs, came to $1.29 per share. That wasn't as bad as Wall Street expected. The average estimate of 13 analysts surveyed by Zacks Investment Research was for a loss of $1.69 per share.
Revenue fell 65% to $2.01 billion, falling short of the analysts' average forecast of $2.12 billion in the Zacks survey.
Shares of Southwest gained about 6% before the start of regular trading. Through Wednesday, the shares have lost slightly more than 5% in 2021, while the S&P 500 index has been nearly flat. Southwest has dropped 22% in the last 12 months.
(© Copyright 2021 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)
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