Southwest Airlines has pulled its full-year 2025 and 2026 EBIT guidance, citing “macroeconomic uncertainty” as the reason for the decision. The carrier plans to scale back its domestic schedule in the second half of the year, following Delta Air Lines and United Airlines.
The airline expects unit revenue to be flat to down by up to 4% in the second quarter compared to last year’s second quarter. This move comes after weaker-than-expected booking trends, which have made it difficult for airlines to forecast their earnings.
Southwest has already shown signs of resilience with its first-quarter earnings and revenue beating analysts’ expectations. The carrier reported a net loss of $149 million, an improvement from a loss of $231 million in the same quarter last year, and revenue of over $6.4 billion, up 1.6% from last year.
CEO Bob Jordan attributed the positive results to new initiatives rolled out by the airline, including changes to its business model and revenue streams. Southwest plans to start charging for checked luggage next month, ending a decades-old policy that allowed customers to check two bags for free.
The move comes as airlines face pressure from activist hedge fund Elliott Investment Management, which has urged the company to raise revenue to compete with rivals. Southwest executives will be questioned by analysts on a quarterly call later this week.
Source: https://www.cnbc.com/2025/04/23/southwest-airlines-luv-earnings-q1-2025.html