By Dave Sebastian Southwest Airlines Co. said it sees modest improvements in business demand and bookings, though they continue to lag le
By Dave Sebastian
Southwest Airlines Co. said it sees modest improvements in business demand and bookings, though they continue to lag leisure trends and hurt close-in demand and average passenger fares in the second quarter.
The airline on Tuesday said leisure fare levels in June and July are comparable with the same months in 2019 as it experienced improvements in leisure passenger traffic and fares.
May business revenue was down about 77% from May 2019, though the decline narrowed from the preceding months. Operating revenue was down 35% in May compared with 2019, and it is expected to be down about 20% in June and 15% to 20% in July compared with 2019, Southwest said.
The company said its average core cash burn was about $2 million a day in May. It sees average core cash burn of $1 million to $2 million a day in the second quarter, compared with its prior estimate of $1 million to $3 million a day, due to better operating revenue trends. It expects to have break-even average core cash flow, or better, in June, the company said.
Southwest said load factor, which measures the proportion of seats filled with paying passengers, was about 84% in May. It sees load factor of about 85% for June and July.
For the second quarter, the company said it continues to expect capacity to rise about 87% from the same period last year and fall about 16% from the 2019 level. It expects August capacity to rise about 39% from the year-ago period and be comparable with August 2019.
The company said it had cash and short-term investments of about $16.6 billion as of June 7. It recently received the second disbursement of about $926 million of payroll support funding under the American Rescue Plan Act of 2021, totaling the full $1.9 billion in expected payroll support under the program, Southwest said.
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