A Southwest Airlines jet leaves Midway Airport in Chicago, Illinois.
Scott Olson | Getty Images
American Airlines posted its fifth straight quarter loss on Thursday while Southwest Airlines posted a profit that was boosted by federal payroll support.
Both airlines have seen an improvement in travel bookings and plan to increase flying during the peak spring and summer months as more people are vaccinated against Covid-19 and tourist attractions reopen.
American Airlines recorded a net loss of $ 1.25 billion. The Fort Worth, Texas-based airline, like its major competitors Delta and United, had to forego much of the business and international travel revenue it had long relied on. American sales were just over $ 4 billion, down nearly 53% from more than $ 8.5 billion a year ago and below analysts’ expectations.
“The pandemic is far from over. We must keep fighting like never before and make sure that the American is in the lead when the green flag falls,” said American CEO Doug Parker and President Robert Isom in a statement to the Employee. “As our world advances every day in the COVID-19 vaccination effort, customers return again on travel and there is no doubt that the pace of recovery is accelerating.”
After adjusting for one-time effects, American had a loss per share of $ 4.32, a penny more than analysts estimated.
Better demand will help both airlines reduce their cash usage. American had an average daily cash burn of $ 27 million in the first quarter, which fell to $ 4 million in March.
American stocks rose 2% before entering the market.
Southwest, meanwhile, said it expects to break even “or better” by June.
The Dallas-based airline posted net income of $ 116 million in the first quarter, compared to a loss of $ 94 million a year ago. The first quarter profit came from more than $ 1 billion in federal aid that offset labor costs.
Southwest’s shares rose 1% in premarket trading after trading lower before reporting results.
Southwest said it is tightening its schedule and that it will fly only slightly less this June than it did in the same month of 2019.
Southwest’s revenue fell to $ 2.05 billion, a decline of more than 51% year over year and slightly below Wall Street analysts’ expectations of $ 2.07 billion.