Southwest liquidity down again in Q3

Washington DC
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Southwest Airlines saw its cash and debt balances decline during the third quarter, as it continued to repurchase stock and pay down debt.

The Dallas-based low-cost carrier had $3.24 billion in cash and short-term investments at the end of September, which was down nearly 2% from $3.3 billion at the end of June. It had $3.66 billion in cash and investments at the end of September 2011.

Southwest had $2.96 billion in long-term debt less current maturities at the end of the quarter, which was also down nearly 2% from $3.02 billion at the end of the first quarter. It had $3.22 billion in debt a year earlier.

Capital expenditure was about $843 million during the third quarter. This includes $464 million to repay debt and other operating activities, $277 million for aircraft payments and $102 million for financing and share repurchase programmes.

"We remain investment-grade with strong liquidity, modest debt and a focus on preserving our financial strength and enhancing shareholder value," said Tammy Romo, chief financial officer of Southwest, during an earnings call on 18 October.