Southwest Airlines Co. trimmed its outlook for burning cash this quarter to about US$20 million a day, citing improved leisure demand in August and September amid the coronavirus pandemic.

The carrier previously expected to burn an average of US$23 million a day in the third quarter. “Recent modest improvements in revenue trends” were the primary reason for the improved forecast, Southwest said in a regulatory filing Wednesday.

Keeping cash losses under control has become critical for airlines since demand collapsed as the pandemic spread in late March and April and requests for refunds outweighed new sales at carriers worldwide. Southwest’s revised outlook could help the airline meet its goal of breaking even by year-end.

Southwest rose 1.8 per cent to US$34.77 before the start of regular trading in New York. The shares dropped 37 per cent this year through Tuesday, the best performance on an S&P 500 index of the five biggest U.S. carriers.

Dallas-based Southwest also revised its outlook for capacity, projecting a third-quarter decline of 30 per cent to 35 per cent from a year earlier. It previously said capacity could drop as much as 30 per cent. The airline warned of such a revision last month as demand improvements stalled in July amid a resurgence of coronavirus cases and broader travel restrictions.

“Year-over-year revenue declines remain significant, and passenger demand and booking trends remain inconsistent, which guided the company’s recent reduction” of capacity in August, September and October flight schedules, the carrier said.

The carrier revised its projection for September capacity sharply lower: down 40 per cent from a year earlier, rather than the 25 per cent decline previously expected. Capacity will decline 27 per cent this month and by half in October, Southwest said.

August operating revenue will be as much as 75 per cent below a year earlier, the carrier said, consistent with an earlier outlook for a drop of 70 to 80 per cent, based on improved leisure travel demand. It is expected to fall 65 to 75 per cent in September.

Southwest decided not to take a second federal loan, crediting its success in raising cash. The carrier, which had signed a nonbinding letter of intent for US$2.8 billion in funding, had US$15.2 billion in cash and short-term investments and US$12 billion in unencumbered assets, as of Tuesday.