Southwest Airlines has reported a second quarter net loss, excluding special items, of $206 million or ($.035) per share. When $724 million in PSP wage offsets and benefits are included, the carrier reported a net income of $348 million or $0.57 per diluted share.
On Thursday (July 22, 2021), Southwest Airlines reported their second quarter financial results for the period ending June 30, 2021. Excluding special items, the carrier reported a second quarter net loss of $206 million or ($0.35) per diluted share. The airline's GAAP net income, including $724 million in wage and benefit offsets related to the U.S. Cares Act Payroll Support Program (PSP) extension, was $348 million or $0.57 per diluted share. Southwest’s second quarter revenue increased year-over-year by 298 percent to $4.0 billion. At June 30, 2021, the airline had liquidity of $17.9 billion and outstanding debt totaling $11.4 billion.
In Thursday’s announcement, Southwest Airlines’ Chairman of the Board and Chief Executive officer, Gary C. Kelly, said in part,
“Second quarter 2021 marked an important milestone in the pandemic recovery as leisure travel demand surged. We generated net income in June 2021, representing our first monthly profit without taking into account the benefit of temporary salaries and wages cost relief provided by PSP proceeds, since the negative effects of the pandemic began in March 2020. While the rapid ramp up in June travel demand provided stability to our financial position, it has impacted our operations following a prolonged period of depressed demand due to the pandemic. Therefore, we are intensely focused on improving our operations as we restore our network to meet demand. I am beyond thankful for our People, who are heroes, and whose resiliency, hard work, and unwavering resolve is on display every day. I am pleased for them that we were able to accrue $85 million of profit-sharing for our Employees in second quarter 2021, for a total of $109 million in first half 2021.
“Compared to the last four quarters, second quarter 2021 operating revenues significantly improved, decreasing 32.2 percent compared with second quarter 2019. June 2021 operating revenues decreased 20.7 percent, compared with June 2019. Monthly operating revenue trends improved sequentially throughout the quarter. Leisure passenger traffic in June 2021 rebounded above June 2019 levels, while passenger fares were comparable with June 2019. Based on current bookings, leisure passenger traffic and fares in July are expected to trend higher than July 2019 levels. Business revenues continue to lag leisure revenue trends; however, we are encouraged by the improvement in business revenues in second quarter 2021, and we continue to experience steady weekly improvements in business bookings, thus far, in July 2021…
“…Our balance sheet strength remains unmatched in the U.S. airline industry and a competitive differentiator. As of June 30, 2021, our total liquidity was $17.9 billion. Average core cash burn was approximately $1 million per day in second quarter 2021; however, as anticipated, we achieved positive average core cash flow in June 2021, which was approximately $4 million per day. Based on our current booking trends and cost outlook, we are hopeful to be profitable, both on a GAAP and non-GAAP basis, again in third and fourth quarter 2021. Should the pandemic negatively affect our current trends, we are prepared to manage through it...”
Celebrating their 50th year of service, Dallas-based Southwest Airlines (NYSE: LUV) has distinguished itself by offering exemplary customer service delivered by over 56,000 team members. Southwest offers a robust point-to-point network with a strong presence across leisure and business markets. In 2019, the carrier served 130 million passengers. During peak travel seasons, the airline operates more than 4,000 daily departures to 101 destinations across the U.S. and 10 additional countries. According to the U.S. Department of Transportation, based on the number of originating passengers boarded, Southwest has been the largest U.S. domestic carrier since 2003.
In trading Thursday Morning (July 22, 2021), shares in Southwest Airlines Co. (NYSE: LUV) were down 2.58% to $51.76/share (10:36 AM EDT).
Source: Southwest Airlines