Fox Business Briefs: Amazon sets up a special unit to reduce on counterfeit products; Southwest Airlines cuts prices on all fall flights to as low as $ 39.
Southwest Airlines said Wednesday that it has decided against securing another loan for Coronavirus from the Trump administration.
| Ticker | Security | Last | Change | Change% |
|---|---|---|---|---|
| LUV | SOUTHWEST AIRLINES CO. | 34.27 | +0.11 | + 0.32% |
The Treasury Department said in July that Southwest and other major U.S. airlines had signed letters of intent as a first step toward seeking federal loans funded by the CARES Act, but a Wednesday filing shows that the Texas-based airline has chosen not to continue on a non-binding loan application of $ 2.8 billion and believes it could secure more financing on its own.
Southwest has already received support from the U.S. government under the CARES Act, with the total subsidy up to $ 3.2 billion by September 30. As part of that loan agreement, the airline cannot cancel or furlough- October 1st. workers.
SOUTHWEST, DELTA, UNITED, ALASKA, JETBLUE FINALIZE CORONAVIRUS LONG TERMS: TREASURY
“As a result of the important actions taken by [Southwest] to support liquidity and its belief that it can secure additional financing on favorable terms, if necessary, the company has since decided not to participate in the secured lending program, “the airline said in a Wednesday submission to the Securities and Exchange Commission .
Southwest Airlines employee La Toya Malone Key flips a kiosk down after it was used by a passenger to secure her boarding pass at Love Field in Dallas. (AP photo / Tony Gutierrez, file)
The submission added that so far in August the airline has “experienced a modest improvement” in the demand from passengers for 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 AIRLINES NO LONGER CLEANING ARMRESTS, SEAT BELTS BETWEEN FLIGHTS
Southwest’s revenue in July and August fell year-over-year by about 70 percent, which was in line with the company’s expectations, and it expects a modest improvement in September alone.
The company added that its “cash burn in July 2020 was about $ 17 million a day.”
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Airlines have taken a significant hit from the coronavirus pandemic and related lockdowns, which have made travelers reluctant to leave planes on board with potentially infected people.
All major U.S. airlines have implemented at least some new rules and security measures, such as mask mandates, leaving downtown cities open, and changing board procedures.
The Trump administration has set a September 30 deadline for airlines to confirm whether they will accept federal loans. Borrowing requires the carriers to maintain employment levels by March 24, at least by this date, if possible. Those who had to trim their labor force could reduce them by only 10%.
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