Southwest Airlines’ outlook remains dim as COVID-19 rages on
Few airlines are better prepared to weather the COVID-19 pandemic than Southwest, given its strong and growing liquidity. The company was well positioned heading into the US summer travel season and demand, while still deeply depressed, was moving off the bottom.
But a significant spike in US cases has stalled what little demand momentum airlines were gaining from, and now Southwest is bracing for high levels of uncertainty. The extreme fluidity is resulting in Southwest scaling back its capacity, which was going to be higher than those of some of its peers.
Southwest is still working to reach a break-even cash burn by YE2020 but also acknowledges that, given the calcification of demand, it may not meet that goal until 1Q2021.
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