U.S. carrier Southwest Airlines Co said on Wednesday it expects cash burn in the third quarter to slow as bookings improve in August from a pandemic-driven grounding of flights worldwide, but flagged inconsistent demand and booking trends.
Southwest, which has decided to not participate in the government’s secured loan program, said it has taken actions to bolster its liquidity and, if required, it could secure additional financing at favorable terms.
The company said it now expects current-quarter cash burn to be about $20 million per day, compared with its prior estimate of about $23 million per day.
It now expects August 2020 operating revenue to fall between 70% and 75% from a year earlier compared with its earlier estimate of a decline of 70% to 80%.
The company also said its third-quarter capacity would likely slump between 30% and 35%, compared with its prior expectation of a 20% to 30% drop.