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Feb 16 (Reuters) - Southwest Airlines on Tuesday forecast slower cash burn in the current quarter as leisure bookings and demand improve in February.
The U.S. budget carrier said it expects average core cash burn to be about $15 million a day in the first quarter, compared with the $17 million it estimated previously, sending its shares up more than 2% in trading before the bell.
Southwest, however, said business travel demand and bookings remained depressed.
U.S. airlines expect demand to improve this year as vaccines become more widely distributed but have warned that the strength of any rebound will depend on the pace of vaccine rollouts and the easing of travel restrictions.
So far, the U.S. vaccine roll-out has been patchy and many European countries are discouraging travel and implementing more travel curbs to contain the spread of new infections.
Southwest late last month reported an annual loss of $3.1 billion, its first such loss since 1972, and said it was facing stalled demand in January and February, driven by high levels of COVID-19 cases and hospitalizations.
Despite strong cost-cutting efforts in place, airlines continue to burn millions of dollars of cash every day.
Southwest also confirmed on Tuesday plans to fly Boeing Co’s 737 MAX, which was approved to fly commercially again in November after a 20-month safety ban, from March 11. (Reporting by Rachit Vats in Bengaluru; Editing by Arun Koyyur and Sriraj Kalluvila)