Southwest expects lower cash burn as vaccines drive leisure travel rebound

Southwest Thursday posted a smaller-than-expected quarterly adjusted loss and forecast lower cash burn in Q2 as rising vaccination rates and pent-up demand for leisure travel signal an "optimistic summer". US airlines are preparing for a rebound in summer bookings after nearly a year in the doldrums due to the COVID-19 pandemic and accompanying travel restrictions. "Vaccinations are on the rise, and COVID-19 hospitalizations in the United States are down significantly from their peak in January 2021," said CEO Gary Kelly. "As a result, we are experiencing steady weekly improvements in domestic leisure bookings." The company said it was adding flights and expects Q2 capacity to rise about 90% from a year earlier, but about 15% below 2019 levels, when air travel was not hit by the COVID-19 crisis. Q2 average core cash burn is expected to be between $2-4m per day, Southwest said, compared with about $13m per day in the previous three months. Southwest said it expects to achieve break-even average core cash flow or better by June.<br/>