© Reuters. FILE PHOTO: A Southwest grounds crew member pats the nose of a Boeing 737-700 plane as it comes to a stop at its gate at William P. Hobby Airport in Houston, Texas, February 20, 2019. REUTERS/Mike Blake
(Reuters) -Southwest Airlines Co trimmed its average core cash burn forecast by $1 million per day for the second quarter, as improving demand for leisure travel is expected to more than offset higher fuel prices.
U.S. airlines are preparing for a rebound in summer bookings after nearly a year in the doldrums as mass vaccination gains pace and countries ease travel restrictions for vaccinated travelers.
Southwest said it saw improvements in leisure passenger travel demand and bookings for May and June this year, adding that based on current bookings, leisure fare levels in June are nearing June 2019 levels.
The company also said it was continuing to see “modest, consistent improvements” in business passenger demand and bookings, though it still lagged leisure travel trends.
The company now estimates its average core cash burn, excluding changes in working capital, to be in the range of $1 million to $3 million per day in the quarter, compared with its previous estimation in the range of $2 million to $4 million per day.
Cash burn, a measure that U.S. airlines began providing in 2020 to measure liquidity in light of the pandemic hit, was about $6 million per day in April. The company added that operating revenues for the month performed in line with its expectations.
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