Southwest Airlines Takes a Different Path Through the Pandemic
Few airlines in the world have been spared from the wreckage of the COVID-19 pandemic. Even U.S. low-fare heavyweight Southwest Airlines (NYSE: LUV) -- which has reported 47 consecutive annual profits -- rang up a sizable loss last quarter.
Yet while Southwest's profitability streak is virtually certain to end this year, its financial position remains extremely strong. As a result, Southwest Airlines has been able to chart a unique course through the pandemic, which could pay off handsomely in the long run.
Southwest slashed its capacity by 55.3% year over year last quarter, but that wasn't nearly enough to offset a steep drop in air travel. Demand was virtually nonexistent in April, when Southwest's load factor (the percentage of seats filled with paying customers) was less than 8%. May and June were somewhat better, but still exceptionally weak by normal standards. As a result, the company generated just $1 billion of revenue in the second quarter -- down 83% year over year.
Source Fool.com
