Southwest’s Streak Ends as Airline Posts First Loss in Half a Century
Photo Credit: Southwest will re-introduce the 737 Max in March even as it faces an uncertain recovery outlook. Wikimedia / John Crowley
Skift Take
Southwest Airlines is raising alarm bells about the cost of mandatory Covid-19 tests for domestic travel after its first annual loss in 48 years. But with containing the virus top of mind for the new administration, the industry may have few legs to stand on.
Richard Nixon was president, Don McLean's American Pie was on top of the charts, and "stewardesses" wore hot pants the last time Southwest Airlines posted an annual loss shortly after its launch.
The $3.1 billion net loss in 2020 was "no surprise" during a year dominated by the coronavirus pandemic, the Dallas-based carrier's chairman and CEO Gary Kelly told investors Thursday. Southwest is ready to "weather this continuing storm," he added.
And that storm only appears to grow. Despite optimism surrounding Covid-19 vaccines, airlines face weak demand and a nearly lifeless business travel market — Southwest executives said corporate flyer numbers are down about 87 percent from 2019 — through at least the first three months of 2021. And potential new testing rules for domestic air travel could put even more of a damper on the recovery until vaccines are more widely available.
"I think it would be a mistake," Southwest president Tom Nealon said in response to questions on th
