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Southwest Reports Second Quarter 2021 Results July 22 , 2021 DALLAS , July 22 , 2021 / PRNewswire / -- Southwest Airlines Co. ( NYSE : LUV ) ( the " Company " ) today reported its second quarter 2021 financial results : . Second quarter net income of $ 348 million , or $ .57 per diluted share , driven by a $ 724 million offset of salaries , wages , and benefits expenses related to the receipt of Payroll Support Program ( PSP ) proceeds under the Consolidated Appropriations Act , 2021 and American Rescue Plan Act of 2021 • Excluding special items¹ , second quarter net loss of $ 206 million , or $ .35 loss per diluted share • Second quarter operating revenues of $ 4.0 billion , down 32.2 percent compared with second quarter 2019 • Generated second quarter operating cash flow of $ 2.0 billion and free cash flow¹ of $ 1.9 billion ; achieved positive average daily core cash flow² in June • Ended second quarter with liquidity3 of $ 17.9 billion , well in excess of debt outstanding of $ 11.4 billion Gary C. Kelly , Chairman of the Board and Chief Executive Officer , stated , " Second quarter 2021 marked an important milestone in the pandemic recovery as leisure travel demand surged . We generated net income in June 2021 , representing our first monthly profit without taking into account the benefit of temporary salaries and wages cost relief provided by PSP proceeds , since the negative effects of the pandemic began in March 2020. While the rapid ramp up in June travel demand provided stability to our financial position , it has impacted our operations following a prolonged period of depressed demand due to the pandemic . Therefore , we are intensely focused on improving our operations as we restore our network to meet demand . I am beyond thankful for our People , who are heroes , and whose resiliency , hard work , and unwavering resolve is on display every day . I am pleased for them that we were able to accrue $ 85 million of profitsharing for our Employees in second quarter 2021 , for a total of $ 109 million in first half 2021 . " Compared to the last four quarters , second quarter 2021 operating revenues significantly improved , decreasing 32.2 percent compared with second quarter 2019. June 2021 operating revenues decreased 20.7 percent , compared with June 2019. Monthly operating revenue trends improved sequentially throughout the quarter . Leisure passenger traffic in June 2021 rebounded above June 2019 levels , while passenger fares were comparable with June 2019. Based on current bookings , leisure passenger traffic and fares in July are expected to trend higher than July 2019 levels . Business revenues continue to lag leisure revenue trends ; however , we are encouraged by the improvement in business revenues in second quarter 2021 , and we continue to experience steady weekly improvements in business bookings , thus far , in July 2021 . " Second quarter 2021 jet fuel prices increased significantly compared with first quarter 2021 and second quarter 2020. Despite cost penalties of technology and weather disruptions , our second quarter 2021 non - fuel cost performance was in line with guidance . We currently expect higher fuel prices and capacity - driven cost increases in third quarter 2021 , year - over - year . To support the return of flight activity , we expect to recall the vast majority of our Employees early from voluntary time - off by the end of third quarter 2021 , which is expected to reduce our prior forecasted savings from voluntary leave programs beyond second quarter 2021. Absent the costs associated with fewer Employees on leave , along with ramp up costs and premium pay offered for Operations Employees , third quarter 2021 non - fuel unit costs , excluding special items and profitsharing , are forecast to trend in line with , or below , 2019 levels4 . " Our balance sheet strength remains unmatched in the U.S. airline industry and a competitive differentiator . As of June 30 , 2021 , our total liquidity was $ 17.9 billion . Average core cash burn² was approximately $ 1 million per day in second quarter 2021 ; however , as anticipated , we achieved positive average core cash flow in June 2021 , which was approximately $ 4 million per day . Based on our current booking trends and cost outlook , we are hopeful to be profitable , both on a GAAP and non - GAAP basis , again in third and fourth quarter 2021. Should the pandemic negatively affect our current trends , we are prepared to manage through it . " We have tremendous flexibility and opportunity with our Boeing 737 MAX ( MAX ) order book . In addition to committing 55 aircraft to 18 new cities and approximately 37 aircraft to Hawaii by the end of this year , we intend to utilize new aircraft next year and beyond to restore most of our pre - pandemic routes and frequencies , and pursue new market opportunities . We can choose to accelerate fleet modernization efforts if these growth opportunities do not materialize . We believe 2022 will be another transition year in the pandemic recovery , and our primary goals will be to deliver operational reliability with optimized resources ; generate solid profits and margins ; restore and grow the route network ; and reduce carbon emissions intensity . " We recently announced I will transition to Executive Chairman in February 2022 , at which time Bob Jordan , Executive Vice President , will become Chief Executive Officer . Bob is well - prepared to take on this important role as a gifted and experienced executive with 33 years of broad experience at Southwest . A smooth transition is underway , and we remain focused on managing through the pandemic , as well as sharpening up our strategic plan with a crystal clear set of initiatives for the next five years . In addition to restoring our route network and core operational efficiency , these initiatives include the continued rollout of Global Distribution System ( GDS ) access for corporate travelers ; the acceleration of fleet modernization efforts to replace our 737-700 aircraft with the MAX ; and the development of tangible steps to minimize our carbon footprint and support our goal to be carbon neutral by 2050. I have the utmost confidence in Bob , our Southwest Leadership Team , and the People of Southwest Airlines to successfully implement these initiatives and lead the Company forward . And I'm proud to continue to be a part of the Team for years to come . " Revenue Results and Outlook The Company's second quarter 2021 operating revenues increased 297.6 percent , year - over - year , to $ 4.0 billion , but decreased 32.2 percent compared with second quarter 2019 due to the pandemic . Second quarter 2021 operating revenue per available seat mile ( RASM , or unit revenues ) was 11.99 cents , a decrease of 18.9 percent , compared with second quarter 2019 , primarily driven by a passenger revenue yield decrease of 18.9 percent and a load factor decrease of 3.5 points .