SouthWest Airlines CEO:We applaud the work of our federal leaders, President Trump, Secretaries Mnuchin and Chao – Idaho Reporter

LUV, National

SouthWest Airlines CEO:We applaud the work of our federal leaders, President Trump, Secretaries Mnuchin and Chao

Southwest Airlines Co. (NYSE: LUV) a major American airline headquartered in Dallas, Texas today issued a Q1 2020 financial results. Via this report we learned that Southwest Airlines had its first loss since 2011. Besides this, here are the key takeaways:


First quarter net loss of $94 million and $.18 net loss per diluted share
Excluding special items, net loss of $77 million and $.15 net loss per diluted share
First quarter operating revenues of $4.2 billion, down 17.8 percent year-over-year
Capital returns of $639 million to Shareholders through share repurchases and dividends during first quarter; dividends and share repurchase programs suspended until further notice
Return on invested capital (ROIC)1 pre-tax of 18.1 percent for the 12 months ended March 31, 2020, or 14.3 percent on an after-tax basis
In April 2020, reached an agreement in principle with the U.S. Department of Treasury (the “U.S. Treasury”) for proceeds of approximately $3.3 billion under the Payroll Support Program (“PSP”) as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act); consists of $2.3 billion in direct payroll support and $948 million in the form of an unsecured 10-year term loan; the Company is expected to issue warrants that enable the U.S. Treasury to purchase up to an aggregate of approximately 2.6 million shares of the Company’s common stock
Since the beginning of 2020, bolstered cash on hand by $6.8 billion as of April 24, 2020, including $1.6 billion of PSP proceeds, or 50 percent; remaining $1.6 billion of PSP proceeds expected to be received by July 2020

We came into this year with significant financial strength and a fortress balance sheet, ending 2019 with cash and short-term investments of $4.1 billion and adjusted debt2 to average invested capital (leverage) of only 24 percent. “- said Gary C. Kelly, Chairman of the Board and CEO and added that LUV is -“…currently the only U.S. airline with an investment-grade rating by all three rating agencies.”

He furthermore thanked to President Trump:”We applaud the work of our federal leaders, President Trump, Secretaries Mnuchin and Chao, and the entire United States Congress”

“Following recent debt transactions, we have unencumbered assets worth nearly $8 billion, including more than $6 billion in aircraft (742 aircraft in its fleet.). We expect to receive the remainder of PSP proceeds, approximately $1.6 billion, over the next three months.”- he concluded

It is worth noting that during Q1 2020, the Southwest Airlines returned $639 million to its Shareholders through the repurchase of $451 million of common stock and the payment of $188 million in dividends.

Southwest Airlines estimates second quarter 2020 capacity to decrease at least 60 percent, YoY.

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