US low-cost operator, Southwest Airlines today released its updated guidance in a Securities and Exchange Commission filing. The Airline’s operating revenue was down 70% in August with load factors at a low 42%. The poor performances of the airline were a result of the impacts caused by the COVID-19 Pandemic.

The airline in August 2020 experienced slight improvements for close-in leisure demand compared with July 2020 with the demand trends continuing into September. Moreover, the airline has seen slight improvements in leisure bookings for September and October. However, Q3 2020 capacity is expected to decrease by 30-35% when compared with the same period last year.

Southwest Airlines Fleet Composition (As at 31 Dec 2019)

Southwest Airlines Fleet Composition (As at 31 Dec 2019)

Southwest has stated that their average daily core cash burn was around $19 million for August 2020 with expectation for Q3 average daily cash burn to be around $17 million.

Southwest currently has seen demand and booking trends primarily for leisure travel and have stated that given the dynamic nature of the current operating environment they will make capacity and fleet plans in line with demand.

The airline as of 15 September 2020 stands strong from a liquidity point of view with $14.8 billion in cash and short-term investments which accordingly to the airline is well in excess of outstanding debt.

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