Southwest sees slower cash burn in third-quarter than prior estimates

(C) Reuters. Southwest Airlines Co. Boeing 737 MAX 8 aircraft at Midway International Airport in Chicago

(Reuters) – Southwest Airlines Co (N:LUV) said on Wednesday it now expects cash burn to slow to $17 million per day in the third quarter, adding that bookings had picked up in August and so far in September after struggling in July.

The U.S. airline had previously estimated daily cash burn of $20 million for the current quarter.

The airline maintained its capacity cut outlook of between 30% and 35% for the third quarter, year-over-year. It plans to reduce its November 2020 flight schedule as well.

Southwest, which has one of the strongest financial positions among U.S. airlines, said it does not currently plan to utilize its loyalty program should it need to secure additional financing.

The airline had cash and short-term investments of about $14.8 billion as of Sept. 15.

Earlier this week, bigger rival Delta Air Lines (N:DAL) said it intends to raise $6.5 billion through new bonds and loans, backed by its SkyMiles loyalty program, in efforts to bolster its cash position.

The budget carrier also trimmed its expectations for the scale of the ongoing fall in operating revenue but said incomings were still likely down around 70% for both this month and last.