Financial Performance and Strategic Shifts
Southwest Airlines reported a $149 million net loss in Q1 2025, with $6.4 billion in revenue, attributing the downturn to decreased demand from domestic leisure travelers and macroeconomic uncertainties.
In response to financial pressures and activist investor demands, Southwest is implementing operational changes, including introducing fees for checked bags and premium seating, while also laying off 1,750 corporate workers.
Industry-Wide Challenges
The airline industry, including competitors like Delta Air Lines and United Airlines, faces a volatile economic landscape exacerbated by the trade war and rising inflation, leading to a pullback in travel spending.
Southwest and other airlines have withdrawn financial forecasts for 2025, citing difficulty in predicting consumer behavior amid economic fluctuations. The airline also plans to cut flights by 1.5% in the second half of the year to adjust for lower demand.