American Airlines and Southwest Airlines were the last of the big four U.S. carriers to report their earnings for the second quarter on Thursday, offering more of the same bad news that Delta and United had shared with their investors earlier.
As the following chart shows, all four airlines saw their operating revenues drop by more than 80% in the three quarters ending June 30, as the coronavirus pandemic brought national and international air travel to a near complete standstill. “This was one of the most challenging quarters in American’s history,” said American Airlines Chairman and CEO Doug Parker. “COVID-19 and the resulting shutdown of the U.S. economy have caused severe disruptions to global demand for air travel.”
Despite federal aid in the form of the Payroll Support Program, which helps airlines cover their payroll expenses as part of the CARES Act, all four carriers suffered substantial losses in the past quarter, which is to be expected when revenue dries up practically overnight. To make things worse, the recent spike in new infections is hurting the industry’s chances of a quick recovery, as it not only affects domestic ticket demand but especially the more lucrative transatlantic air travel. As it stands, Americans are banned from traveling to large parts of Europe, and, if case numbers continue to rise, that probably won’t change anytime soon.