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(Updates with Southwest CEO comments, stock price, trims)
By David Shepardson
Aug 12 (Reuters) - Southwest Airlines Co Chief
Executive Gary Kelly said on Wednesday he does not expect the
airline will be profitable in 2020 amid the coronavirus
pandemic, snapping a 47-year streak of posting consecutive
full-year profits.
"As long as the case counts are high, I think that we have
to expect that travel will be relatively modest," Kelly said at
a Texas Tribune event. "We’re continuing to see traffic and
revenues down 75% versus a year ago today and to think that
would recover to the point we would be profitable I just think
is unrealistic.”
The company last month posted a $915 million loss for the
second quarter. Kelly said it is still burning through about $20
million a day.
"We're still losing cash every single day," he said. "We've
got a long way to go before we can feel like we are out of
intensive care."
Southwest's has cut its scheduled flights by about 35% to
40%, Kelly added. "The airlines are less full," Kelly said,
noting the airline was not booking middle seats.
Nearly 17,000 Southwest employees have agreed to voluntary
long-term leaves or exit packages.
"The solution here is to get our passengers back -- not to
try to shrink the airline so radically that we're prepared for a
very, very modest travel environment," Kelly said.
Southwest shares Wednesday closed largely unchanged.
Earlier, Southwest, Ryanair Holdings Plc and EasyJet
Plc were the only three airlines whose bonds are still
rated investment grade, S&P Global Ratings said, while
estimating a drop of up to 70% in global air passenger traffic
for 2020.
Carriers operating long-haul international flights including
American Airlines, United Airlines and Delta Air
Lines have been among the worst hit due to the pandemic.
S&P's forecast for 2020 global passenger traffic has
worsened to a drop of between 60% and 70% from between 50% and
55% estimated in May.
(Reporting by Sanjana Shivdas in Bengaluru and David Shepardson
in Washington; Editing by Anil D'Silva and Tom Brown)
