The United States, Southwest Airlines, and Alaska Airlines received help from their 535 friends in Congress in the management of the second quarter. They reported every Thursday that they made meager profits from the federal government’s salary support payments. They aim to prevent thousands of layoffs during the pandemic. 4,444 However, like Delta Air Lines and United Airlines, which previously announced second-quarter results, Southwest Airlines, Alaska Airlines, and American Airlines reported adjusted losses for the second quarter. Although much smaller than the previous quarters, once When government support was interrupted, the calculation was withdrawn. The US
, headquartered in Fort Worth, stated that it achieved a small gain of US$19 million for the first time after five consecutive quarters of losses during the pandemic, which was adjusted to a loss of US$1.1 billion after a one-time accounting adjustment. To date, the biggest adjustment of this type is the federal salary support payment received by the operator. This loss is equivalent to $1.69 per share. At the same time, Dallas-based
Southwest stated that its profit of US$348 million was also adjusted to a loss of US$206 million. On an adjusted basis, the company lost 35 cents per share. Seattle-based
Alaska reported a profit of US$397 million in the second quarter, but after adjusting the US$489 million of federal support payments to salaries and other special accounting items, it lost US$38 million, or 30 cents per share.
The rapid recovery in demand for leisure travel in the second quarter drove a substantial increase in the revenue of the three major airlines. American Airlines revenue increased to 7.48 billion U.S. dollars in the second quarter. This is an increase from the US $ 1.6 billion in the second quarter of last year, when the pandemic had the most severe impact on airlines and travel demand. It is also higher than the $ 4 billion in revenue in the first quarter. Still, American’s second-quarter revenue fell nearly 38% from the $ 12 billion reported in the second quarter of 2019 before the pandemic.
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Similarly, Southwest Airlines’ revenue of US$4 billion in the second quarter was four times the US$1 billion in the same period last year and almost double the US$2.1 billion reported since the first quarter of this year. But the US$4 billion in revenue in the second quarter is still 32% lower than the US$5.59 billion raised by Southwest Airlines in the second quarter of 2019.
Alaska’s second-quarter revenue has more than tripled from just $ 421 million in the second quarter of 2020 to $ 1.5 billion. But before the pandemic in the second quarter of 2019, Alaska generated nearly $ 2.3 billion in revenue, which means that the second quarter of this year’s revenue is still 35% lower than the pre-pandemic level. 4,444 executives from the three airlines said they expect leisure travel demand for the remainder of the summer to remain at or above current levels. After Labor Day, which traditionally marks the end of the summer vacation, US officials said they expect demand for high-priced commercial fares to increase. In a conference call with analysts and reporters Thursday morning, Chief Revenue Officer Vasu Raja stated that the company’s offices will begin to reopen in September, which he hopes will lead to domestic business trips four to six weeks later. in September. The number has increased significantly. , in the first half of October – in those who return to the office to establish their new work priorities and schedule appointments with clients, suppliers and other people they want to visit in person.
Southwest and Alaska officials said they also expect business travel demand and income to increase after the summer vacation. But Southwest Airlines is particularly careful to avoid forecasting earnings after the current third quarter. Leaders in Alaska and the United States have stated that they expect to achieve profitability in the third and fourth quarters without government funding.
However, the leaders of Southwest Airlines pointed out that they will complete their project on July 26 and begin to sell air tickets through the SABRE reservation system, which will have a positive impact on their plan to increase the domestic business travel market share. Historically, Southwest Airlines has always been regarded as a low-cost, low-fare airline. Under normal circumstances, Southwest Airlines has become the largest airline in the United States in terms of domestic passenger traffic. With its growth, especially in major cities, Southwest Airlines began to pay more attention to attracting a higher proportion of domestic business travelers, who tend to pay higher fees. This is why it will start selling tickets through SABRE on Monday, and why it has already started selling through other large reservation systems Amadeus and Travelport. These systems facilitate more corporate travel bookings because companies can use these systems to better track and compare fares, and they can also compare their total costs based on volume discount agreements negotiated with carriers. In the past, Southwest Airlines lacked these various reservation systems, so it was difficult or impossible to compete with many companies for travel contracts. Southwest Airlines President
Tom Nilan said in a conference call with analysts and reporters that the seven largest corporate customers of his airline, all of which are professional service companies that provide consulting, accounting and similar services, have cancelled Restrictions on employee travel. This was imposed from the beginning during the pandemic. He explained that this convinced the leaders of Southwest Airlines that the recovery in business travel demand has already begun and may increase significantly by the end of this year.
“We expect this year’s business travel will reach about 50% of what it was before the pandemic by the end of this year,” he said. “But it now appears that we were down 50% at the end of the quarter. It happened faster than expected.
in the Southwest

By Peter

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