On January 28, 2021, Southwest Airlines (LUV) reported its first annual loss of $3.1 billion since 1972, as a result of continued negative impacts to passenger demand due to COVID-19 crisis.
“The COVID-19 pandemic devastated the world, and our heart goes out to all those affected. The airline industry was hit especially hard in 2020, and we incurred our first annual net loss since 1972,” Southwest Airlines Chief Executive Officer Gary Kelly said.
Southwest Airlines (LUV) disclosed that the annual operating revenues declined approximately by 60% in 2020, adding the financial report of 4Q2020, which resulted in $908 million net loss, compared to a $514 million profit in 2019.
The airline’s statement outlined that it was expecting the first quarter of 2021 to look very much like the fourth quarter of 2020. It expects an average core cash burn of about $17 million per day ‒ higher than the $12 million it recorded in the fourth quarter of 2020.
“While vaccine availability should mark the beginning of the end of this pandemic, current passenger booking trends do not indicate significant improvement through March 2021,” Kelly said.
In the report, Southwest Airlines (LUV) announced that it expects to return Boeing 737 MAX aircraft to its fleet on March 11, 2021. By the end of the year, the air carrier plans to receive 35 Boeing 737 MAX 8 deliveries.