Spat on and kicked: Why these workers want a mask mandate
New York (CNN Business)The last time Southwest Airlines posted an annual loss was 1972, when it was a small upstart airline flying a handful of planes on Texas-only routes.
Since then, it has grown to become the nation’s fourth largest airline, reporting 47 consecutive profitable years while its largest rivals flew into and out of bankruptcy during the ups and downs of the difficult airline industry.
Until Thursday, that is.
Southwest (LUV) reported it lost a record $3.5 billion in 2020, excluding special items, as the Covid-19 pandemic brought airline traffic to a near halt and it was forced to ground many of its jets due to lack of business. Revenue for the year plunged $13.4 billion, or 60% to $9 billion for the year.
The losses were not unique to Southwest: They have been universal across major airlines throughout the globe.
The six largest US airlines lost $30.4 billion last year
American Airlines (AAL), the world’s largest airline by some measures, also posted an even bigger record annual loss of $9.6 billion, excluding special items, on Thursday. Revenue tumbled 62% to $17.3 billion.
And JetBlue (JBLU) reported a record annual loss as well, losing $1.6 billion for the year excluding special items — compared to a profit of $568 million on that basis a year ago.
United (UAL) and Delta (DAL) had already posted their own losses, with Delta going from record profits to a record loss in only one year.
All told, the nation’s six largest airlines — American, Delta, United, Southwest, JetBlue and Alaska Air (ALK) — lost $30.4 billion in 2020, excluding special items, compared to a combined profit on that basis of $13.8 billion a year earlier in one of the most profitable year on record for the US industry.
And the 2020 losses came despite $50 billion in government help for the airlines industry approved in March to help it weather the storm.
American Airlines’ loss was a bit smaller than what analysts expected, and its revenue was slightly stronger than forecast too. But the stock took off like a rocket in premarket trading, rising as much as 87% ahead of the open before settling down to a 28% gain in the first minutes of the regular trading session.
The stock was being talked up on Reddit by some who hoped to drive up the price and put a squeeze on investors who bet against it by shorting it.
“AAL flying to moon?” wrote one investor. “Let’s see if we are going to get some tasty juice out of a squeeze.”
Those investors have recently driven up the price of shares of GameStop (GME), another troubled money losing company.
American CEO Doug Parker declined to comment on the stock move in his call with analysts and media Thursday: “As a rule, we don’t speculate on the day-to-day movements of our share price. We’ll stick to that rule today.”
Airlines’ problems are expected to continue for at least the first half of this year, as analysts are forecasting losses in at least the first two quarters of 2021 for all major US airlines. They expect full-year losses for each of them, as well.
Although the Covid-19 vaccine could soon unleash some pent-up demand for air travel, that isn’t expected to happen until the late summer or early fall, at best.
Source: Read Full Article