Dallas-based Southwest reported a $116 million profit in the first quarter, boosted by more than $1 billion in federal payroll aid and said it expects its core cash flow to break even “or better” by June.
Without the federal aid, Southwest would have lost $1 billion in this quarter. At the same time, Texas-based American airlines reported a loss of $1.25 billion in the first quarter, but the losses are is narrowing as bookings pick up.
Southwest and other airlines say that demand for travel is continuing to improve. The airline said on Thursday that bookings for leisure trips within the United States have been improving each week since mid-February.
“While the pandemic is not over, we believe the worst is behind us, in terms of the severity of the negative impact on travel demand,” Chairman and CEO Gary Kelly said in a statement.
Southwest is getting the bulk of cash flow from the pickup in leisure travel, while its competitors like Delta, United and American depend on business travel and international flying, both of which are badly impacted at the moment due to pandemic.
Kelly also expressed gratitude for federal payroll aid , from which the airline industry has received around $54 billion in grants to pay workers and a further $25 billion in low-interest loans since pandemic knocked the door.
Southwest posted revenue of $2.05 billion, while American airlines' first-quarter revenue stood at just over $4 billion.
Picture : Colin Brown Photography
