Southwest posts $915m loss, warns travel demand will remain weak without coronavirus vaccine

Southwest said Thursday it lost $915m in Q2 compared with $741m in net income a year earlier and warned that travel demand will likely remain depressed until there’s a vaccine or treatment for the coronavirus. The airline said demand has softened in recent weeks, echoing comments from other airline executives who have said a spike in Covid-19 cases coupled with travel restrictions in states like New York have hurt ticket sales that began recovering in late spring. Southwest estimated its Q3 capacity to decrease between 20% and 30% over last year. Revenue dropped nearly 83% to a little over a $1b from $5.9b last year, though sales in the quarter were higher than analysts’ estimates. “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,” CEO Gary Kelly said. “We expect air travel demand to remain depressed until a vaccine or therapeutics are available to combat the infection and spread of COVID-19.” Kelly said Southwest will “aggressively and frequently” adjust its flight schedule in “this volatile demand environment.”<br/>