49-year-old Dallas based Southwest Airlines is the largest domestic carrier in the United States and the 3rd largest Airline by capacity serving the country. The carrier serves 130 million passengers per year on their network of over 102 destinations using a fleet of 737 aircraft that are all Boeing 737s (34 of these aircraft are the B737 Max that are grounded due to regulatory orders)

Southwest Airlines The 3rd Largest Carrier in the US By Capacity (w/c 16-Dec-2019)

Southwest Airlines The 3rd Largest Carrier in the US By Capacity (w/c 16-Dec-2019)

Source: Blue Swan Daily

The airline that revolutionized low-cost travel has reported a Q2 loss of $1.5 billion and revenues down in Q2 2020 by 82.9 % compared to Q2 2019 with losses attributable to the dampened demand for air travel due to the COVID-19 Pandemic. The carrier has managed to reduce spending by $7 billion than originally planned with average cash burn reducing from $30 million per day amounting to a total of $900 million in April to $16 million a day with a total cash burn of $500 million in June. The airline expects Q3 to be another difficult period with the increase in COVID-19 cases causing a reversal in revenue trends.

The Chairman and CEO, Gary C. Kelly stated that they are monitoring the volatile environment to proactively manage their network in line with the demand in the markets they serve while not expecting demand to pick up until a cure is found to contain the virus.

Southwest Airlines Largest Network Points on w/c 15-Jun-2020

Southwest Airlines largest network points (w/c 15-Jun-2020)

Source: Blue Swan Daily

Financially, the airline is in a strong liquidity position with cash and short-term investments amounting to $14.5 billion at the end of June 2020, the financial position should help the airline through the crisis especially when airlines around the world are cutting costs to conserve cash.

The airline currently has around 400 aircraft including the 34 B737 Max that are grounded (temporarily parked and in long term storage).

Source: Southwest Airlines