For the first time in almost a decade, Southwest Airlines has posted its first quarterly loss that resulted from the coronavirus pandemic. The airline later went on to say that they do not expect the losses to let up any time soon.
Southwest reported a first-quarter loss of $94 million from a $387 million profit. The airline last reported a quarterly loss in September 2011.
"This is an unprecedented time for our nation and the airline industry," Chairman and CEO Gary Kelly said in a written statement. "The U.S. economy has been at a standstill, and the current outlook for second-quarter 2020 indicates no material improvement in air travel trends."
Travel bans and stay-at-home orders have led to almost 50 percent of Americans canceling their upcoming travel plans, with Southwest seeing a peak in March. Air travel is down nearly 95 percent from last year.
According to ABC News, the carrier expects revenue to drop by 90 to 95 percent in April and May compared to 2019, with only five to 10 percent of seats filled. Kelly believes that the Southwest will become a "drastically smaller airliner" if air travel does not improve by July.
In order to stay afloat during the pandemic, Southwest has canceled thousands of flights, requested that employees take unpaid time off, grounded many of its planes and negotiated for $3.2 billion in federal aid to help cover payroll costs through September. The carrier has also borrowed $6.8 billion this year and plans to apply for more federal funding.
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