|LUV||SOUTHWEST AIRLINES CO.||61.48||-0.28||-0.45%|
the Treasury Department said in July that Southwest and other major U.S. airlines had signed letters of intent as a first step toward research federal loans funded by the CARES Act, but a regulatory filing Wednesday shows the Texas-based airline chose not to proceed on a non-binding basis $ 2.8 billion applies for a loan and thinks she can get more financing on her own.
The southwest has already received U.S. government payroll support under the CARES Act, with total funding of $ 3.2 billion by September 30. Under this loan deal, the airline cannot lay off or fire workers until October 1.
The record added that so far in August, the airline “has seen modest improvement” in demand from leisure passengers booking flights shortly before travel.
“However, year-over-year revenue declines remain significant, and passenger demand and booking trends remain inconsistent,” the company revealed.
Southwest’s sales in July and August declined year-over-year by about 70%, which was in line with the company’s expectations, and it expects only modest improvement in September.
The company added that “its cash consumption in July 2020 was around $ 17 million per day.”
Airlines have been hit hard by the coronavirus pandemic and related lockdowns, which have left travelers reluctant to board planes with potentially infected people.
All of the major U.S. airlines have implemented at least some new rules and safety measures, such as mask warrants, leaving middle seats open, and changing boarding procedures.
The Trump administration has set a September 30 deadline for airlines to confirm whether they will accept federal loans. Taking loans requires carriers to maintain employment levels from at least March 24 until then, if possible. Those who had to downsize could only reduce them by 10%.