Southwest Airlines posts first annual loss since 1972 on virus woes

A Southwest airplane approaches to land in San Diego, California August 24, 2020. REUTERS/Mike Blake

(Reuters) - Southwest Airlines Co reported an annual loss of $3.1 billion on Thursday, its first since 1972, and said it was facing stalled demand in January and February driven by high levels of COVID-19 cases and hospitalizations.

Airlines are hoping that COVID-19 vaccine distribution will help lift demand, but so far the U.S. vaccine rollout has been patchy and there are concerns that new variants of the virus could further spread the infection, threatening a speedy recovery.

“While vaccine availability should mark the beginning of the end of this pandemic, current passenger booking trends do not indicate significant improvement through March 2021,” Southwest Chief Executive Officer Gary Kelly said.

The airline forecast first-quarter average core cash burn of about $17 million per day, higher than the $12 million per day it recorded in the fourth quarter.

The U.S. airline plans to return Boeing’s 737 MAX to service on March 11 and expects to receive 35 737 MAX 8 deliveries through 2021, seven of which were delivered in December.

The Dallas-based company reported a net loss of $908 million, or $1.54 per share, in the fourth quarter ended Dec. 31, compared with a profit of $514 million, or 98 cents per share, a year earlier.

On an adjusted basis, the company lost $1.29 per share. Total operating revenue plunged 64.9% to $2.01 billion.

Southwest ended 2020 with liquidity of $14.3 billion.

Reporting by Sanjana Shivdas in Bengaluru; Editing by Maju Samuel