Southwest says it has enough cash for two years as demand improves

Southwest said Wednesday it has enough cash to carry on business for the next two years, up from its prior forecast of 20 months, as travel demand gradually picks up. The company’s assessment is based on current cash and short-term investments of $13.9b and an expected average daily cash burn of about $20m in June. “The company has continued to experience a modest improvement in passenger demand and bookings in June 2020—primarily leisure-driven demand,” Southwest said. The airline said current estimates regarding operating revenues, capacity and load factor in June have improved over previous estimations for the month. Southwest now expects operating revenue to decrease in the range of 70% to 75% year-over-year, and both passenger capacity and load factor to fall 40% to 50% compared to last year. The company also anticipates continued improvement in July, with higher revenue and more seats filled on flights. However, the company announced Tuesday that is planning to keep middle seats open through at least Sep. 30 to help prevent the coronavirus from spreading. <br/>