By David Shepardson
(Reuters) - Southwest Airlines Co (N:LUV) Chief Executive Gary Kelly said on Wednesday he does not expect the airline will be profitable in 2020 amid the coronavirus pandemic, snapping a 47-year streak of posting consecutive full-year profits.
"As long as the case counts are high, I think that we have to expect that travel will be relatively modest," Kelly said at a Texas Tribune event. "We’re continuing to see traffic and revenues down 75% versus a year ago today and to think that would recover to the point we would be profitable I just think is unrealistic.”
The company last month posted a $915 million loss for the second quarter. Kelly said it is still burning through about $20 million a day.
"We're still losing cash every single day," he said. "We've got a long way to go before we can feel like we are out of intensive care."
Southwest's has cut its scheduled flights by about 35% to 40%, Kelly added. "The airlines are less full," Kelly said, noting the airline was not booking middle seats.
Nearly 17,000 Southwest employees have agreed to voluntary long-term leaves or exit packages.
"The solution here is to get our passengers back -- not to try to shrink the airline so radically that we're prepared for a very, very modest travel environment," Kelly said.
Southwest shares Wednesday closed largely unchanged.
Earlier, Southwest, Ryanair Holdings Plc (I:RYA) and EasyJet Plc (L:EZJ) were the only three airlines whose bonds are still rated investment grade, S&P Global Ratings said, while estimating a drop of up to 70% in global air passenger traffic for 2020.
Carriers operating long-haul international flights including American Airlines (O:AAL), United Airlines (O:UAL) and Delta Air Lines (N:DAL) have been among the worst hit due to the pandemic.
S&P's forecast for 2020 global passenger traffic has worsened to a drop of between 60% and 70% from between 50% and 55% estimated in May.