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Southwest CEO: Radical restructuring coming if demand doesn't improve by Sept. 30
Southwest CEO: Coronavirus sank business by 90%
Southwest Airlines CEO Gary Kelly on managing business amid coronavirus and the future of the industry.
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Southwest CEO Gary Kelly said Thursday he will have to "radically restructure" the airline if travel demand does not improve dramatically by the fall.
As part of $3.29 billion in federal payroll loans and grants to Southwest, the company may not lay off workers through Sept. 30 due to the coronavirus pandemic.
"We've got $14 billion in cash, you can do the quick math in your head," Kelly told FOX Business' "Mornings With Maria." "Things have to improve here quickly or we run out of money, and if they don't improve after Sept. 30, we would have to radically restructure not just Southwest Airlines but the whole industry."
SOUTHWEST AIRLINES CO.
Travel demand is down around 90 percent as a result of COVID-19, Kelly said, but things have begun to improve in May. Southwest and American Airlines will begin offering international travel again in June as restrictions ease around the world and in the U.S.
$1.6T IN CENTURY-OLD DEBT GIVES TRUMP LEVERAGE AGAINST BEIJING
"I haven't seen anything like this in my career, obviously," Kelly told Maria Bartiromo. "We came into the crisis with very low debt to total capital, we're investment-grade credit rating, and we had a lot of cash. We boosted our cash reserve up to almost $14 billion. Normally, we'd have $3 billion in the bank, so you get an idea of the magnitude of the war chest we're trying to build just to get us through this crisis."