Company Overview and Financial Preparedness
Steps taken in 2020 to address impacts from COVID-19
Focus Areas
Capacity
Reduce Costs
Preserve
Liquidity and
Cash
New Revenue
Opportunities
Employees
and
Customers
Actions
•
Significantly reduced capacity
Continuously monitored demand and booking trends and adjusted capacity on an ongoing
basis
• Reduced annual 2020 cash outlays and spending by ~$8 billion compared with original plans
• Voluntary Separation Program and Extended Emergency Time Off Program; approximately
25% of workforce participated resulting in approximately $1.0 billion in estimated cost savings
in 2021
• Canceled or deferred hundreds of capital spending projects, cut discretionary spending, and
modified vendor and supplier payment terms
• Reduced combined 2020 and 2021 CapEx by ~$5.5B compared with original plans
.
•
•
Raised $18.9 billion (net of transaction fees) in 2020: $13.4 billion in debt issuances and sale-
leaseback transactions, $2.2 billion through a common stock offering, and $3.4 billion of PSP
proceeds¹
Repaid $5.5 billion of debt during 2020; Fully available $1.0 billion revolving credit line
Pursued additional revenue opportunities that utilized idle aircraft and Employees
• Added a total of 18 new airports that have either been opened or announced since the
beginning of the pandemic
• GDS participation live with Travelport and Amadeus; Sabre is live as of July 26, 2021
•
⚫ Southwest Promise-additional cleaning practices; physical-distancing procedures; required
face masks; additional policies for our Employees to protect themselves and safely transport
our Customers; science-based approach
•
Customer policy changes: extended flight credits and status
¹Amounts received pursuant to the Payroll Support Program (the "PSP") under the CARES Act were utilized to directly offset payroll expenses incurred by the Company, including specified benefits,
between April 2020 and September 2020. For further information regarding the PSP, refer to the Company's Forms 8-K filed April 21, 2020, June 1, 2020, June 30, 2020, July 31, 2020, and September
30, 2020. In January 2021, the Company entered into definitive documentation with the U.S. Treasury for further payroll support under the Consolidated Appropriations Act, 2021 (the "PSP
Extension"). Refer to the Company's Forms 8-K filed on January 15, 2021 and March 5, 2021 for further information regarding the PSP Extension. In April 2021, the Company entered into definitive
12 documentation with the U.S. Treasury with respect to funding support pursuant to the American Rescue Plan Act of 2021 (the "ARP"). Refer to the Company's Form 10-Q filed on April 27, 2021, Form
8-K filed on June 3, 2021, Form 10-Q filed on July 27, 2021, and Form 10-Q filed on October 26, 2021, for further information regarding funding under the ARP.
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