US airlines register deep losses

American Airlines and Southwest Airlines each reported deep losses in the third quarter on Thursday, but said they would burn less cash in the months to come as leisure bookings show signs of recovery from this year’s coronavirus-driven collapse.

They warned, however, that passenger traffic would remain fragile until a COVID-19 vaccine was made widely available, and renewed calls for another $25 billion in government payroll support to protect jobs as lawmakers continue to wrangle over a broader COVID-19 relief deal.

The airlines also pushed forward with a campaign to persuade travelers that it is safe to fly.

Southwest said it would stop blocking middle seats in December, referencing recent medical research about the coronavirus showing that the combination of air filtration on airplanes combined with face masks “make the risk of breathing COVID-19 particles on an airplane is virtually non-existent.”

It said the practice of keeping middle seats open had bridged it from the early days of the pandemic, “when we had little knowledge about the behavior of the virus, to now.”

In a study released last week, the U.S. Department of Defense called the risk “very low.”

American and rival United Airlines have been selling all available seats, while Delta Air Lines is blocking middle seats through early January.

American Airlines said it expects its cash burn rate to fall to about $25 million to $30 million a day in the fourth quarter from about $44 million per day in the third quarter and $58 million per day in the second. It ended the third quarter with $13.6 billion in available liquidity, after securing a total of $7.5 billion in federal loans and said it could also issue up to $1 billion of equity in an at-the-market offering to further bolster liquidity.

Reuters