Southwest Airlines (LUV -4.41%) announced plans to sell about $1.6 billion worth of its common stock and raise $1 billion in convertible senior notes, boosting liquidity as the airline grapples with the COVID-19 pandemic.

The airline is offering of 55 million shares for sale, with the underwriters holding an option to purchase up to 8.25 million additional shares.

A ground crew worker directs a plane to its gate.

Image source: Getty Images.

The announcement comes on the same day that Southwest disclosed first quarter results. The company lost $0.15 per share in the quarter, better than the $0.41 per share loss analysts had predicted, on revenue of $4.23 billion that came in about $200 million below consensus.

Of course, operations deteriorated significantly after the March 31 quarter ended. Airlines have been hard hit by the pandemic, which has cut travel demand by upwards of 90%, and they could be left dealing with a prolonged recession even after the virus is contained.

Southwest stands alone among airlines in being able to say it has never resorted to layoffs or pay cuts, keeping its entire workforce intact even after the attacks of Sept. 11. However, CEO Gary Kelly has warned that could change in the Fall if traffic does not return.

The airline had $5.5 billion in cash as of March 31 and expects to burn though $30 million to $35 million in cash each day in the current quarter.