Southwest Airlines reported a first-quarter profit of $116 million, due in part to federal support, and has begun recalling pilots in anticipation of a strengthening summer vacation season, CEO Gary Kelly said in a statement announcing the result.
The airline expects to see positive cash flow by June, he noted.
“I’m relieved, I’m enthused, I’m optimistic, I’m grateful,” he added in comments quoted by the Wall Street Journal.
For the quarter, American Airlines lost $1.25 billion on $4 billion in revenue, its smallest loss since the pandemic set in.
American has announced plans to rehire 300 pilots.
The successful vaccine campaign makes airlines’ increased bookings “feel much more permanent,” American’s CEO Douglas Parker said on a call with analysts and investors reported by the WSJ.
The new bookings are being made by leisure travelers, the airlines and analysts report.
Business travel will resume to some degree late this year, the carriers have said, although some large corporate customers have indicated they will begin to field their road warriors again in the third quarter.
Southwest has said it expects business travel to return to no more than 40 or 50 percent of its pre-pandemic volume by the end of this year.
The pandemic created a divide between American, Delta, and other carriers depending largely on business travelers and airlines such as Southwest that focus on domestic leisure flyers.
Because its routes are within the U.S., Southwest was spared the chaos of closed borders and restrictions that varied among countries.
Now the airline is planning to add 17 cities to its U.S. network and to be flying at 96 percent of its capacity by June, compared to 40 percent in this year’s first quarter.
American predicts it will fly at as much as 85 percent of its capacity this summer and is adding at least 40 new domestic routes.
TREND FORECAST: The growing demand among nations to only allow the vaccinated to enter their countries will keep airline travel from meeting pre-COVID War levels.
As we have forecast, the big money for airlines is from business travel, which will not rebound for at least another year. When it does, it will not come back to pre-COVID War levels. Indeed, the new Zoom world has become part of the new COVID world and businesses are content to meet online to cut expenses.
And, as we have noted, hardly a word has been heard from the mainstream media about the devastating effects the COVID War has had on the convention and trade show sectors, which have not only damaged the hospitality and hotel sectors and lost tax revenue for cities that host them but have also sharply cut business travel.
