American Airlines and Southwest trim losses but still lose billions of dollars
Posted October 22, 2020 7:47 a.m. EDT
Updated October 22, 2020 7:48 a.m. EDT
CNN — American Airlines and Southwest Airlines both reported billions of dollars in losses Thursday, but that's what passes for an improvement in the battered industry these days.
American, the world's largest airline, reported it lost $2.8 billion in the third quarter excluding special items. That's down from the $3.4 billion it lost in the second quarter and was roughly in line with Wall Street expectations.
Southwest reported it lost $1.2 billion, also an improvement from the $1.5 billion it lost in the second quarter -- and was better than forecasts.
The US airlines went into the quarter forecast to lose a combined $10 billion, as the Covid-19 pandemic has hammered air travel. Delta and United have both reported billions of dollars in in third-quarter losses, but as with American and Southwest they trimmed their losses from the second quarter. The US airlines lost a combined $12 billion in the second quarter.
The situation isn't turning around fast at any of the airlines. Both Southwest and American said they expect to continue to burn through millions of dolalrs in cash every day into 2021. Southwest said it will need to double sales in the third quarter to match the cash it is spending.
Southwest said it has been selling only two-thirds of the seats on its planes to allow passengers to leave the middle seats open for social distancing. But it said it will end that practice and begin selling all seats as of December 1.
United and American were already selling all seats, leaving Delta as the only major US airline still leaving the middle seat unsold. But Delta announced last week that it will probably end that practice sometime in 2021.