American, Southwest report combined Q2 losses of $3 billion

July 23 (UPI) -- U.S. carriers American and Southwest reported substantial second-quarter losses on Thursday, the latest signals of the COVID-19 pandemic's enormous impact on global air travel.

American Airlines reported a $2.1 billion loss in the second quarter and said revenue tumbled more than 86%. Southwest similarly reported a $915 million loss for the quarter.

American said it mitigated losses by cutting daily spending to $30 million in June, reducing flights, grounding planes and furloughing workers.

"This was one of the most challenging quarters in American history," AA Chairman and CEO Doug Parker said in a statement. "COVID-19 and the resulting shutdown of the U.S. economy have caused severe disruptions to global demand for air travel."

Hoping to attract customers, American said it will waive fees to change reservations for new tickets by July 31, extend the fee waiver for travel through Sept. 30 and allow flyers to rebook on less crowded flights at no cost.

American also said it plans to reduce its total operating and capital expenditures this year by more than $15 billion.

Southwest revenue fell nearly 83% to just over $1 billion, down from $5.9 billion a year ago. The budget carrier said second-quarter sales beat analysts' estimates and projects third-quarter capacity to decrease between 20% and 30%.

Excluding federal assistance from the Payroll Support Program, part of the CARES Act, Southwest said the quarterly loss rose to $1.5 billion.

"We were encouraged by improvements in May and June leisure passenger traffic trends, compared with March and April," Southwest CEO Gary Kelly said. "However, the improving trends in revenue and bookings have recently stalled in July with the rise in COVID-19 cases.

"We expect air travel demand to remain depressed until a vaccine or therapeutics are available."