Southwest Airlines reports first loss in 48 years
Posted January 28, 2021 7:31 a.m. EST
CNN — The last time Southwest Airlines posted an annual loss was 1972, when it was a small upstart airline flying a handful of planes on Texas-only routes.
Since then, it has grown to become the nation's fourth largest airline, reporting 47 consecutive profitable years while its largest rivals flew into and out of bankruptcy during the ups and downs of the difficult airline industry.
Until Thursday, that is.
Southwest reported it lost a record $3.5 billion in 2020, excluding special items, as the Covid-19 pandemic brought airline traffic to a near halt and it was forced to ground many of its jets due to lack of business. Revenue for the year plunged $13.4 billion, or 60% to $9 billion for the year.
The losses were not unique to Southwest: They have been universal across major airlines throughout the globe.
American Airlines, the world's largest airline by some measures, also posted an even bigger annual loss of $9.6 billion, excluding special items, on Thursday. Revenue tumbled $28.4 billion, or 62% to $17.3 billion.
United and Delta had already posted their own losses, with Delta going from record profits to a record loss in only one year.
All told the nation's five largest airlines -- American, Delta, United, Southwest and Alaska Air -- lost $28.8 billion in 2020, excluding special items, compared to a combined profit on that basis of $13.2 billion a year earlier in one of the most profitable year on record for the US industry.
And the 2020 losses came despite $50 billion in government help for the airlines industry approved in March to help it weather the storm.
Airlines' problems are expected to continue for at least the first half of this year, as analysts are forecasting losses in at least the first two quarters of 2021 for all major US airlines. They expect full-year losses for each of them, as well.
Although the Covid-19 vaccine could soon unleash some pent-up demand for air travel, that isn't expected to happen until the late summer or early fall, at best.