June 17, 2020 / 11:10 AM / 19 days ago

Southwest Airlines says has enough cash for two years as demand improves

(Reuters) - Southwest Airlines (LUV.N) said on Wednesday it has enough cash to carry on business for the next two years, up from its prior forecast of 20 months, as travel demand gradually picks up.

The company’s assessment is based on current cash and short-term investments of $13.9 billion and an expected average daily cash burn of about $20 million in June.

“The company has continued to experience a modest improvement in passenger demand and bookings in June 2020—primarily leisure-driven demand,” Southwest said.

In the second quarter, Southwest said it expects average daily core cash spending of between $30 million and $35 million. The airline had earlier forecast a capacity decline of up to 60% from a year ago.

Last week, American Airlines (AAL.O) said it expects to halt its daily cash burn by the end of 2020, thanks to cost-cutting measures and an improvement in travel demand.

Southwest shares were trading marginally higher at $36.67 before the bell.

Reporting by Sanjana Shivdas in Bengaluru; Editing by Arun Koyyur

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