(Reuters) – Southwest Airlines Co (LUV.N) said on Tuesday it has agreed with Boeing Co (BA.N) to sharply cut its 737 MAX delivery schedule through 2021 and is reviewing its order book as the coronavirus pandemic caused its first quarterly loss in nine years.

FILE PHOTO: Southwest planes sit in a desert graveyard near Victorville, California, U.S. March 28, 2018. REUTERS/Lucy Nicholson

Southwest, which only operates Boeing 737s and is the world’s largest customer of the grounded 737 MAX, will take no more than 48 new 737 MAX jets before Dec. 2021, a fraction of the 123 it had originally scheduled.

Just months ago, airlines including Southwest were cancelling flights and delaying growth plans and aircraft retirements because the 737 MAX grounding left them without enough planes.

Dallas-based Southwest has removed its 34 MAX planes from its fleet until Oct. 30 as the aircraft awaits regulatory approval to fly again following two fatal crashes.

As passenger demand has neared zero due to the COVID-19 crisis, airlines are parking hundreds of jets, accelerating aircraft retirement plans and deferring jet deliveries under changes that could ultimately lead to canceled orders as the industry braces for a slow recovery.

Both Boeing and European planemaker Airbus SE (AIR.PA) are due to publish quarterly results on Wednesday.

Southwest swung to a $94-million net loss in the first quarter from a $387 million profit a year earlier, and warned that operating revenues would fall by 90-95% in both April and May, when it does not expect load factors to surpass 10%.

Total operating revenue fell 17.8% to $4.2 billion in the quarter.

While the airline has more bookings for June and July – albeit in a drastically reduced flight schedule – it said it cannot reasonably estimate any revenue trends beyond May.

“We have no idea what kind of cancellations will come through before those travel dates; there’s no way to be comfortable with what will happen to those reservations,” Southwest CEO Gary Kelly told Reuters.

Facing unprecedented flight cancellations, airlines are scrambling to preserve and raise cash.

Southwest had $9.3 billion in cash on hand as of April 24, with leverage of 47%.

On Tuesday it announced an additional capital raise including a public stock offering of 55 million shares, worth around $1.6 billion at Monday’s closing price of $29.11, and $1 billion worth of convertible debt.

Shares lost 0.8% to $28.87, underperforming rivals.

Southwest’s average daily cash burn will slow to between $30 million and $35 million in the second quarter, it said.

The airline is receiving about $3.3 billion in government payroll support and is considering tapping an additional $2.8 billion in secured government loans under the stimulus package known as the CARES Act.

The coronavirus outbreak has led to the deaths of more than 207,000 people, including more than 55,000 in the United States, a Reuters tally shows.

Stay-at-home orders remain in place across much of the world and it is an open question as to when people will feel comfortable traveling again and under what safety requirements.

Airlines including Southwest support pre-boarding temperature checks, face masks and social distancing measures on airplanes and in airports.

Under the terms of government payroll support, airlines cannot lay off employees before Sept. 30. If demand remains weak, Southwest has said it may need to downsize.

Excluding special items, Southwest’s quarterly net loss was $77 million, or a $0.15 loss per share.

Delta Air Lines Inc (DAL.N) posted a first-quarter loss last week and American Airlines Group Inc (AAL.O) and United Airlines Holdings Inc (UAL.O) are due to report on Thursday.

Reporting by Tracy Rucinski and Sanjana Shivdas; editing by Jason Neely and Nick Zieminski

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