Southwest Airlines reported second-quarter 2025 net income of $213 million, or $0.39 diluted EPS, a 42% decrease year-over-year. Total operating revenues declined 1.5% to $7.24 billion, missing Wall Street estimates, primarily due to a 1.3% decrease in passenger revenue and a 4.1 percentage point drop in load factor.
The company significantly revised its full-year 2025 EBIT guidance (excluding special items) to a range of $600 million to $800 million, reflecting a nearly $1 billion impact from a 'precipitous decline in the macro environment' and a $100 million increase in fuel costs. Despite this, Southwest reiterated its incremental EBIT contribution targets from initiatives: $1.8 billion for 2025 and $4.3 billion for 2026.
For Q3 2025, Southwest forecasts RASM to be flat to down 2.0% year-over-year on roughly flat capacity. Operating expenses for Q2 increased by 0.9% to $7.02 billion, driven by higher salaries, wages, and benefits (up 8.8%). However, new checked bag fees, implemented May 28, 2025, 'exceeded expectations,' with an estimated EBIT contribution of over $350 million for full-year 2025 and a $1 billion annual run rate.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.