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Southwest forecasts lower third-quarter cash burn as bookings improve

Southwest forecasts lower third-quarter cash burn as bookings improve

FILE PHOTO: Air travelers wear face masks waiting to board a Southwest Airlines flight as the spread of coronavirus disease (COVID-19) continues, at Oakland International airport in Oakland, California, U.S., April 9, 2020. REUTERS/Shannon Stapleton

REUTERS: U.S. carrier Southwest Airlines Co said on Wednesday it expects cash burn in the third quarter to slow as bookings improve in August from a pandemic-driven grounding of flights worldwide, but flagged inconsistent demand and booking trends.

Southwest, which has decided to not participate in the government's secured loan program, said https://bit.ly/3271sa0 it has taken actions to bolster its liquidity and, if required, it could secure additional financing at favorable terms.

The company said it now expects current-quarter cash burn to be about US$20 million per day, compared with its prior estimate of about US$23 million per day.

It now expects August 2020 operating revenue to fall between 70per cent and 75per cent from a year earlier compared with its earlier estimate of a decline of 70per cent to 80per cent.

The company also said its third-quarter capacity would likely slump between 30per cent and 35per cent, compared with its prior expectation of a 20per cent to 30per cent drop.

(Reporting by Ankit Ajmera in Bengaluru)

Source: Reuters

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