A Southwest Airlines Boeing 737 airplane departs from Harry Reid International Airport as one other airplane taxis in Las Vegas, Nevada, on March 15, 2025.
Kevin Carter | Getty Images News | Getty Images
Southwest Airlines said Wednesday that it’ll reduce its capability within the second half of the yr, as more signs point to weaker domestic bookings this yr.
The airline said it expects unit revenue to be flat to down as much as 4% within the second quarter from a yr earlier. Southwest said it is just not reaffirming its guidance for earnings before interest and taxes for 2025 and 2026.
“Amid the present macroeconomic uncertainty, it’s difficult to forecast given recent and short-lived booking trends,” Southwest said in a securities filing.
United Airlines and Delta Air Lines earlier this month announced plans to reduce their domestic capability within the second half of the yr. Delta also pulled its full-year forecast while United provided two forecasts, calling the U.S. economy “inconceivable” to predict.
The carrier’s first-quarter earnings and revenue beat analysts’ expectations.
Here is how Southwest performed in the primary quarter compared with Wall Street expectations, in keeping with consensus estimates from LSEG:
- Loss per share: 13 cents adjusted vs. lack of 18 cents adjusted
- Revenue: $6.43 billion vs. $6.40 billion expected
The carrier has laid out dramatic changes to its greater than half-century-old business model over the past yr, increasing the channels during which it sells its fares to sites akin to Expedia, to launching a plan to finish its open-seating model for assigned seats and introducing restrictive basic economy tickets.
Next month, it plans to begin charging many travelers to examine their luggage, ending its decades-old policy of allowing customers to examine two bags without cost.
Southwest has been under pressure from activist hedge fund Elliott Investment Management, which took a stake within the airline and won board seats last yr, to lift revenue to higher compete with rivals which have premium seats, lounges and international networks.
“We’re seeing positive results on recently rolled out initiatives,” CEO Bob Jordan said in an earnings release.
In the primary quarter, Southwest posted a net lack of $149 million, an improvement from a lack of $231 million a yr ago, and revenue of greater than $6.4 billion, which was up 1.6% from a yr ago. Adjusting for special items, Southwest reported a lack of 13 cents per share for the three months that ended March 31.
Southwest executives will face questions from analysts on a quarterly call at 12:30 p.m. ET on Thursday.
