Southwest Airlines said Wednesday that daily cash burn has improved slightly more than expected due to a modest improvement in demand. CNBC's Jim Cramer and Carl Quintanilla discuss. Subscribe to CNBC PRO for access to investor and analyst insights: [ Ссылка ]
Southwest Airlines on Wednesday reported “modest” improvements in passenger demand this month as vacationers booked last-minute trips despite the coronavirus pandemic.
The company is also turning down a $2.8 billion government loan, saying it can get financing elsewhere. Southwest and other airlines last month reached agreements for portions of the $25 billion in loans for struggling U.S. airlines in the CARES Act in March. Southwest raised $15.4 billion — $13.2 billion in debt and $2.2 billion in a stock sale — and received $3.3 billion in government payroll support.
The Dallas-based carrier expects its revenue to fall by 70% to 75% from August 2019, a slight improvement from its previous forecast of sales down as much as 80% from last year. It said planes were flying 40% to 45% full this month, better than the 30% to 40% it previously expected.
Cash burn for the third quarter will likely improve slightly to $20 million a day, up from a forecast of $23 million
Shares were up more than 3% in morning trading.
Still, booking trends are “inconsistent,” Southwest warned. After demand increases in May and June, booking improvements stalled along with the increase in coronavirus cases around the U.S., it said.
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