Southwest Airlines' Cash Burn Ticks Down Again
There's no end to the COVID-19 pandemic in sight. As a result, air travel demand hasn't improved much following a steep drop earlier this year. In recent days, passenger throughput at TSA checkpoints has averaged less than 30% of year-ago levels -- despite widespread availability of bargain airfares during what would usually be the peak summer travel season.
In this environment, U.S. airlines have had to focus on what they can control. Most notably, that includes minimizing cash burn and bolstering their balance sheet flexibility. Last week, Southwest Airlines (NYSE: LUV) gave shareholders good news on both fronts.
Back in April, Southwest Airlines projected that core cash burn would average between $30 million and $35 million a day in the second quarter of 2020. Fortunately, solid cost performance and an uptick in bookings (especially in June) allowed it to beat that forecast. Daily cash burn slowed from $30 million in April to just $16 million by June, putting average daily cash burn for the full quarter at $23 million.
Source Fool.com
