Southwest Airlines has reported a fourth quarter net loss of $908 million, and a full year 202 net loss of $3.1bn.
Fourth quarter 2020 total operating revenues decreased 64.9% to $2bn, as a result of continued negative impacts to passenger demand and bookings due to the pandemic. Fourth quarter 2020 operating revenue per ASM (RASM, or unit revenues) was 8.48 cents, a decrease of 40.8%, primarily driven by a load factor decline of 29.3 points and a passenger revenue yield decrease of 18.7%.
Annual 2020 total operating revenues decreased 59.7%, year-over-year, to $9bn. Annual 2020 RASM was 8.75 cents, a decrease of 38.6%, driven by a load factor decrease of 31.1 points and a passenger revenue yield decrease of 10.6%.
Southwest ended 2020 with liquidity of $14.3 billion, well in excess of debt outstanding.
Southwest’s average core cash burn was approximately $12 million per day in fourth quarter 2020, which it expects to rise to $17 million per day in first quarter 2021, as a result of “continued softness in demand and a seasonally weaker travel period in January and February 2021, as well as rising fuel prices”. After changes in working capital, this figure is expected to be in the range of $10 million to $15 million per day, compared with approximately $15 million per day in fourth quarter 2020.
Southwest reports that current passenger booking trends do not indicate significant improvement through March 2021. “While we hope to achieve cash burn break even in 2021, it is wholly dependent upon a substantial rebound in passenger traffic and revenue; and, it is difficult to predict the timing of such a rebound, especially with respect to business travel,” said Southwest.
