More major carriers report steep losses

Two major airlines reported huge second-quarter losses Thursday and warned that the recovery in air travel seen in April has stalled as coronavirus cases surge in the U.S.

American posted a loss of more than $2 billion, and Southwest lost $915 million.

That pushed the combined loss of the nation’s four biggest airlines to more than $10 billion in three months.

Between them, American and Southwest carried 15.4 million passengers from April through June. A year earlier, more than 98 million people jammed on to their planes.

With all those lost ticket sales, airlines have turned to cutting costs and hoarding cash in a desperate bid to hang on until the shadow of COVID-19 passes.

Southwest CEO Gary Kelly said he was encouraged by a pickup in leisure travel during May and June after the dark days of March and April.

“However, the improving trends in revenue and bookings have recently stalled in July with the rise in COVID-19 cases,” he said.

American benefited when Sun Belt states eased health restrictions in the spring to boost their economies. Bookings by small and medium businesses in Texas rose from 10,000 in April to 45,000 in June even while corporate bookings were nearly zero, executives said.

The airline added flights in June and July, hoping to capture an increase in summer leisure travel. The gambit apparently worked. However, after Labor Day about 40% of American’s revenue typically comes from business travel.

Analysts believe the Aprilthrough-June quarter will turn out to be the industry’s low point.