Southwest Airlines Earnings: Waiting for Demand to Recover
Last week, Southwest Airlines (NYSE: LUV) confirmed what everyone already knew: The low-fare airline's streak of 47 consecutive profitable years ended in 2020. Southwest reported another sizable loss for the fourth quarter, and the company is bracing for an equally poor performance this quarter.
That said, Southwest Airlines has the strongest balance sheet in the U.S. airline industry. Management plans to capitalize on that strength to ensure that the carrier is ready to respond quickly when demand begins to return.
Like most of its peers, Southwest Airlines experienced improving demand trends in October, followed by a deceleration in booking momentum in November as COVID-19 case counts rose. Management noted that demand was much stronger during holiday weeks than during off-peak periods. Due to these trends, revenue plunged 65% year over year to $2 billion for the fourth quarter. Southwest posted an adjusted net loss of $761 million ($1.29 per share), narrower than the $1.68 per share loss analysts were expecting.
Source Fool.com
