Southwest to cut flights this year, pulls guidance, citing ‘macroeconomic uncertainty’ – NBC Los Angeles

• Southwest Airlines pulled its full-year 2025 and 2026 EBIT guidance, citing “macroeconomic uncertainty.”
• The carrier plans to cut its schedule in the second half of the year, following Delta Air Lines and United Airlines.

Southwest Airlines said Wednesday that it will reduce its capacity in the second half of the year, as more signs point to weaker domestic bookings this year.

The airline said it expects unit revenue to be flat to down as much as 4% in the second quarter from a year earlier. Southwest said it is not reaffirming its guidance for earnings before interest and taxes for 2025 and 2026.

“Amid the current macroeconomic uncertainty, it is 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 scale back their domestic capacity in the second half of the year. Delta also pulled its full-year forecast while United provided two forecasts, calling the U.S. economy “impossible” to predict.

The carrier’s first-quarter earnings and revenue beat analysts’ expectations.

Here is how Southwest performed in the first quarter compared with Wall Street expectations, according to consensus estimates from LSEG:

• Loss per share: 13 cents adjusted vs. loss of 18 cents adjusted
• Revenue: $6.43 billion vs. $6.40 billion expected

The carrier has laid out dramatic changes to its more than half-century-old business model over the past year, increasing the channels in which it sells its fares to sites such as Expedia, to launching a plan to end its open-seating model for assigned seats and introducing restrictive basic economy tickets.

Next month, it plans to start charging many travelers to check their luggage, ending its decades-old policy of allowing customers to check two bags for free.

Southwest has been under pressure from activist hedge fund Elliott Investment Management, which took a stake in the airline and won board seats last year, to raise revenue to better compete with rivals that have premium seats, lounges and international networks.

“We are seeing positive results on recently rolled out initiatives,” CEO Bob Jordan said in an earnings release.

In the first quarter, Southwest posted a net loss of $149 million, an improvement from a loss of $231 million a year ago, and revenue of more than $6.4 billion, which was up 1.6% from a year ago. Adjusting for special items, Southwest reported a loss 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.