DALLAS (WBAP/KLIF) – The impact of COVID-19 on the travel industry is evident in recent numbers posted by Dallas based Southwest Airlines.
According to the company’s CEO, Gary Kelly, Southwest reported its first full-year loss since 1972.
Kelly said that the annual operating revenue for the airline dropped by 60% last year amid a massive decrease in demand brought on by the continued spread of COVID-19. According to a statement from the CEO, the airline lost $3.1 billion in 2020, and $908 million in the fourth quarter alone.
“We came into the year well-prepared with significant financial strength and started the year strong with an outstanding operational performance and solid net income growth, year-over-year, in January and February 2020, combined,” said Kelly. “In late February 2020, we began to experience a precipitous drop in passenger demand and bookings due to the pandemic. The situation escalated dramatically, and by mid-March 2020, trip cancellations began to exceed new bookings.”
Annual 2020 capacity decreased approximately 34%, year-over-year, and the airline reduced annual 2020 cash outlays by approximately $8 billion, compared with original plans.
“We implemented voluntary separation and extended leave programs to better align staffing levels and overhead costs to reduced flight schedules,” Kelly said. “I sincerely appreciate the 15,000 Southwest Family Members who participated in those crucial programs to reduce our annual 2020 salaries, wages, and benefits expense by approximately $565 million. We also raised cash of $10.9 billion, net of repayments and excluding Payroll Support Program proceeds, and ended 2020 with liquidity of $14.3 billion and approximately $12 billion in unencumbered assets.
Southwest Airlines expects losses to continue during the first quarter of this year but hopes that with the release of COVID-19 vaccines the travel industry will start to bounce back in the not so distant future.
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