Southwest Airlines reported a first-quarter 2025 loss of $149 million, or $0.26 per share. The adjusted loss was $0.13 per share, which beat analyst estimates of an $0.18 loss. However, the company announced the withdrawal of its profit outlook for both 2025 and 2026, previously set at $1.7 billion and $3.8 billion in EBIT, respectively.
The decision to pull guidance was attributed to 'macroeconomic uncertainty' and 'recent and short-lived booking trends,' with CEO Bob Jordan stating that consumer demand is 'highly impacted' by President Trump's tariff policies. For the second quarter, Southwest forecasts unit revenue to decline as much as 4% year-over-year.
In response to the weak demand outlook, Southwest is proactively reducing capacity in the second half of 2025, resulting in full-year capacity growth of roughly 1%, down from its earlier projection of 1% to 2%. This strategic adjustment aims to protect margins amidst the challenging economic environment.
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