After the airline industry screamed to a near halt at the height of the coronavirus pandemic in March and April, Southwest Airlines (LUV) said it is seeing a “modest improvement” in the month of August for passenger demand.

However, despite the improvement, the airline said in an SEC filing its year-over-year revenue declined significantly with passenger demand and bookings remaining “inconsistent.”

In the same filing, Southwest said that it had declined a $2.8 billion government loan, citing the ability to find financing from another source. Southwest, along with other airlines, had signed a letter of intent to receive a loan from the federal government in July under the CARES Act.

Since that time, Southwest has raised $15.4 billion, which equates to $13.2 billion in debt, $2.2 billion in a stock sale, and $3.3 billion in government payroll funding.

Southwest said in its SEC filing it expects revenue to decrease by as much as 70% to 75% compared to August 2019. Previously, the airline estimated a decrease of 80% compared to last year for the month.

Cash burn for the third quarter is also expected to improve to $20 million a day, up from the airline’s previous forecast of $23 million a day.

Southwest also said it anticipates September will see a drop in capacity of about 40% compared to last year as it expects to see capacity fall by 30% to 35% in Q3. October capacity is also expected to be down 40% to 50% compared to last year.

The International Air Transport Association estimates airlines have lost 84.3 billion this year and seen demand drop 54% as a result of the coronavirus pandemic. Total industry revenue is down by half, some $419 billion.

Shares of Southwest were trading at $34.96 as of 12:37 p.m. EDT, up 80 cents or 2.35%.

If air traffic doesn't triple, Southwest Airlines warned it may lay off staff If air traffic doesn't triple, Southwest Airlines warned it may lay off staff Photo: AFP / Frederic J. BROWN