Southwest Airlines has lowered its full‑year 2025 earnings‑before‑interest‑and‑taxes (EBIT) forecast to $500 million, a sharp reduction from the previously guided $600‑$800 million range. The company’s decision reflects a reassessment of demand and cost pressures that have emerged in the first half of the year.
The guidance cut comes after a year of strong performance. Southwest reported a net income of $465 million in 2024 and $597 million when special items are excluded. In the third quarter of 2025, the airline posted a net income of $54 million ($58 million excluding special items), underscoring the company’s solid profitability before the recent headwinds.
The primary drivers behind the lower EBIT outlook are twofold. First, a 43‑day federal government shutdown disrupted flight operations, caused staffing shortages, and forced the FAA to reduce flight slots at major airports, which in turn dampened passenger bookings and revenue. Second, fuel costs have risen sharply, increasing operating expenses across the fleet. Together, these factors have compressed margins and prompted the company to temper its earnings expectations.
In a statement, President and CEO Bob Jordan said, “We remain confident in our ability to navigate the current challenges. While the shutdown and fuel price volatility have impacted our outlook, we are focused on maintaining cost discipline and leveraging our operational efficiencies to protect profitability.” His remarks highlight the company’s emphasis on disciplined cost management amid external pressures.
Analysts have responded to the guidance change by revising their own estimates downward. Some have cut fourth‑quarter profit forecasts for U.S. airlines in light of the shutdown and winter weather, while others note that Southwest’s bookings have returned to pre‑shutdown levels, suggesting a potential rebound in demand. The market reaction has been mixed, reflecting uncertainty about the duration of the headwinds and the company’s ability to recover momentum.
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