Southwest Airlines (LUV) - Get Report posted a narrower-than-expected second-quarter earnings loss on Thursday, but the air carrier said it expects air travel demand to remain depressed until a vaccine or treatment for the coronavirus becomes available.
Shares of the Dallas, Texas company were off slightly to $33.26 a share in premarket trading.
Southwest Airlines posted a net loss of $915 million, or $1.63 per share, compared with net income of $741 million, or $1.37 per share a year ago. The adjusted loss came to $2.67 per share, compared with FactSet's consensus estimate for a loss of $2.73 per share.
Revenue tumbled 82.9% from a year ago to $1.01 billion, beating FactSet's estimate for $947.9 million.
Passenger revenue declined 87.2% to $704 million, beatings expectations of $577 million.
Load factor, which measures the percentage of available seating capacity that is filled with passengers, slid to 31.4% from 86.4%, ahead of expectations of 20.5%.
Southwest ended the second quarter with cash of $15.5 billion.
Airlines have been pummeled by the coronavirus pandemic as passengers have dramatically cut down on travel to abide by social distancing requirements.
"We were encouraged by improvements in May and June leisure passenger traffic trends, compared with March and April; however, the improving trends in revenue and bookings have recently stalled in July with the rise in COVID-19 cases," Gary Kelly, chairman and CEO, said in a statement. "We expect air travel demand to remain depressed until a vaccine or therapeutics are available to combat the infection and spread of COVID-19."
Southwest Airlines said second-quarter average core cash burn was $23 million per day, and forecast current quarter cash burn to be in line with the second quarter.
Kelly said that about 16,900, or 27% of Southwest Airlines employees, signed up for voluntary extended emergency time off and separation programs to avoid involuntary furloughs and layoffs.
"We will adjust our flight schedule aggressively and frequently in response to this volatile demand environment," Kelly said.