American, JetBlue and Southwest Collectively Post Over $12 Billion Loss in 2020

Three U.S. based airlines announced their 2020 fourth quarter and year-long results, all with very dour results. Between American Airlines, JetBlue and Southwest Airlines, the three airlines reported total year losses of over $12 billion collectively. For Southwest, it was the first year of operational losses in 48 years.

In any given year, airline losses may be reported in the millions, if there are any at all. In a year that will be forever marred by COVID-19, those losses are now being reported in the billions. American Airlines, JetBlue and Southwest Airlines all reported their 2020 fourth quarter and annual results, each posting a significant drop.

American Reports Full-Year Net Loss of $8.9 Billion

The last of the legacy carriers to report their financials, American Airlines reported a total annual net loss of $8.9 billion, reflecting a drop of $18.36 per share. Without the net special items, the loss grows to $9.5 billion.

With rumors of a national air travel COVID-19 testing mandate looming over the announcement, American chief executive Doug Parker did not come out for or against any plan during the call. Instead, he noted that the carrier worked with government partners to expand international testing, and would work with stakeholders again if a testing rule for domestic travel was put in place.

“We support international testing because that’s about getting more people to be comfortable flying across borders,” Parker said, according to a call transcript posted by Seeking Alpha. “And we have worked with regularity with the administration to make that happen.

“I didn’t actually say that we weren’t supportive of doing…more expansion in that. What I said is, we haven’t heard – we haven’t been asked to do,” Parker continued. “If we do, we certainly would want to make sure it was something that wouldn’t restrict demand.”

Looking forward, the airline is hopeful for some semblance of recovery in 2021. To those ends, the airline will continue moving forward with their JetBlue partnership and announce new international routes for the months ahead, including Athens and Tel Aviv.

JetBlue Full-Year Net Loss at $1.3 Billion, Marking Significant Losses

For JetBlue, the year was made even worse when compared to 2019. Two years ago, the airline posted a net profit of $569 million. In 2020, the COVID-19 pandemic turned the airline upside-down, posting a total net loss of $1.3 billion. The carrier is now hoping for recovery to begin in 2022, starting with an aggressive plan to cut $1.2 billion in operating costs this year.

The path forward for the New York-based airline will focus on leisure travel. Although the airline will get value out of their partnership with American, the goal is to continually build on their “visiting friends and relatives” strategy.

“Our loyalty program is built for leisure; our operation is built for leisure. Obviously, our goal is always to balance supply and demand, but at the end of the day that we’re going to be competitive here,” Joanna Geraghty, president and chief operating officer of JetBlue, said in the call conference, according to the Seeking Alpha transcript. “We’ll continue to lean into leisure VFR markets where the demand is, as we move forward, and that’s our plan for the future.”

Southwest Posts First Losing Year in 48 Years with $3.1 Billion Loss

The last time Southwest Airlines posted a loss was 1972, one year after founder Herb Kelleher launched the Dallas-based airline. That streak broke in 2020, when the carrier reported a total net loss of $3.1 billion.

Although the airline was not forced into layoffs for the first time in their history, 15,000 workers did participate in voluntary separation and extended leave programs. The sacrifice saved the airline $565 million in payroll, as aircraft were grounded by a catastrophic drop in demand.

For 2021, the airline’s 50 anniversary will be muted as they look towards recovery. Southwest plans to once again list fares in global distribution software platforms to attract business travel, breaking a long-standing tradition the carrier once said kept ticket prices low.

“Our primary financial goals for 2021 are to preserve the strength of our balance sheet and investment-grade credit rating; arrest cash operating losses; and achieve and sustain break even, or better, cash flow and earnings as the airline business recovers,” airline CEO Gary Kelly said in a press release. “The pandemic persists and travel demand remains depressed, but we celebrate our 50th year of service in 2021 with renewed hope and optimism about the future of Southwest Airlines.”