Southwest Airlines and American Airlines would have lost nearly $4 billion combined without the help of government payroll aid in the first quarter, but the carriers are envisioning a path back to profitability after a year of devastating losses from the COVID-19 pandemic.

Dallas-based Southwest Airlines actually turned in a $116 million profit in the first quarter, the carrier’s best result since 2019, mostly thanks to $1.2 billion in payroll support as part of two government stimulus programs.

But even though the company couldn’t make money on its own, daily losses are narrowing and Southwest could get back to making a daily operating profit by the middle of the year.

“While the pandemic is not over, we believe the worst is behind us, in terms of the severity of the negative impact on travel demand,” Southwest CEO Gary Kelly said in a statement.

Fort Worth-based American Airlines said it turned an operating profit of about $4 million a day in March, excluding debt and severance payments. But American still lost $1.3 billion between January and June, a loss that would have been about $2.7 billion without government aid or the $163 million it spent on early retirement costs.

“We’re still going through tough times in the business. We don’t like losing that much money,” American Airlines CEO Doug Parker told CNBC Squawk Box on Thursday morning.

Vaccine distribution and a gradually reopening economy are adding optimism to airlines that have become accustomed to multibillion-dollar losses since March 2019 when the COVID-19 pandemic upended global and domestic travel. Airlines started reporting an uptick in sales in mid-February and some are even reporting that summer ticket sales are near 2019 levels.

“We believe there is significant pent-up demand for leisure travel and are optimistic about summer 2021,” Southwest said Thursday. “In response, we are in the process of adding flights in June 2021, and we currently expect June available seat miles to be only slightly less than June 2019 pre-pandemic levels.”

There is still a long way to go until either airline is performing the way it did before COVID. International and business travel remain down and those segments are among the most profitable for airlines compared to price-sensitive leisure travelers.

American reported $4 billion in revenue for the quarter, down 53% compared to the first quarter of 2020, which was also greatly impacted by the developing COVID-19 crisis.

Southwest Airlines brought in $2.1 billion in revenue, which was also down 51.5% compared to a year ago.

Kelly is correct that the worst of the pandemic is over financially for airlines, even if losses are still likely to continue for a bit longer. A year ago, some analysts were predicting that at least one major airline would succumb to bankruptcy because of massive daily cash burn levels.

Severe cost-cutting, massive borrowing and slowly improving travels helped avert that.

However, Southwest and American have added significantly to debt loads over the last year and that will require time to pay off. American now has about $41 billion in debt, even though it has about $20 billion in cash that it’s hoarded during the last year.

“We can certainly service the debt but it’s higher than we want,” Parker said on CNBC “We entered 2020 looking to reduce our debt by $8 [billion] to $10 billion over the next five years — we’re still going to do that from here but now it’s higher than we wanted it to be.”