Southwest Airlines (NYSE:LUV) joined the rush of U.S. airlines to draw down schedules due to the COVID-19 coronavirus pandemic, saying in a regulatory filing late Monday it would cut capacity by 20% through June at least.
Airlines have been grappling with plunging flight demand, leading to questions about the viability of the global industry. As the situation has worsened large international carriers have drawn down their schedules by 40% or more, and smaller airlines have been cutting as well.
Southwest earlier in the month took some initial steps, including pay cuts for executives, but the company on Monday withdrew its guidance for 2020 and said it was trimming its schedule.
"The company has experienced more dramatic declines in passenger bookings in March and second quarter 2020, as well as an unprecedented increase in close-in trip cancellations," Southwest said in the filing. "The company has recently experienced several days of net negative bookings, primarily in March and April 2020, where trip cancellations outpaced new passenger bookings."
Southwest is also instituting a hiring freeze, offering voluntary leave option for employees, and evaluating ways to cut capex spending.
The airline recently raised $500 million in fresh debt and entered into a $1 billion term loan credit facility agreement. It currently has about $6.2 billion in unrestricted cash.