Airlines' first-quarter earnings reveal scope of coronavirus pain
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Southwest Airlines reported Tuesday a first-quarter net loss of $94 million as the coronavirus pandemic brings the airline industry to its knees.
The big picture: It's clear the pandemic has painfully impacted the travel industry, specifically airlines, which are now reporting their losses during 2020's first quarter as U.S. travel plunges 95% from the same time last year.
Why it matters: This is the first time Southwest has reported a loss in nearly a decade.
- The airline doesn't fly to Asia, so it felt the pain of the pandemic later than its competitors.
- The company is cutting its schedule through July — normally a peak travel season — as flight cancellations remain at an unprecedented high.
- Southwest notes they have been able to maintain their liquidity, but aren't able to project revenue past May.
Worth noting, per Axios' Joann Muller: Southwest's quarterly report also disclosed that there could be further delays in the return to flight for Boeing’s grounded 737 MAX fleet.
- Citing new information from Boeing on the MAX's return-to-service date, Southwest said it doesn't expect to be flying the trouble aircraft before Oct. 30, adding to the woes for both companies.
- Boeing did not immediately respond to a request for comment.
What's next: Other airlines will be reporting their first-quarter numbers in the next week or so.
- United is expecting a pretax loss of about $2.1 billion.
- Delta is expecting an adjusted pretax loss of $422 million.