Southwest Airlines (LUV) has reported a quarterly financial loss and pulled its guidance for the remainder of the year, citing “macroeconomic uncertainty.”
The Dallas, Texas-based carrier reported a first-quarter loss of -$0.13 U.S. per share, which was better than a loss of -$0.18 U.S. expected among analysts.
Revenue in the quarter totaled $6.43 billion U.S., which was ahead of the $6.40 billion U.S. expected on Wall Street.
Looking ahead, Southwest’s management team said they plan to reduce capacity in the second half of this year as signs point to weaker domestic air travel demand and bookings.
The airline added that it expects unit revenue to be flat to down 4% in the current second quarter from a year earlier.
However, Southwest did not reaffirm its full-year guidance for either 2025 or 2026, saying that there is too much “macroeconomic uncertainty” right now.
Rivals United Airlines (UAL) and Delta Air Lines (DAL) also announced plans to scale back their domestic capacity in the second half of this year. Delta also pulled its full-year guidance.
Southwest’s financial results arrive as the carrier undertakes dramatic changes to its business model, ending its open-seating system and introducing restrictive tickets and higher prices.
In May of this year, the airline plans to start charging travelers to check luggage, ending its policy of allowing customers to check two bags for free.
Southwest is under pressure from activist investor Elliott Management, which has taken a stake in the airline and won board seats.
Elliott Management has been pushing Southwest to raise revenue to better compete with rival carriers.
Southwest Airlines’ stock has declined 24% this year to trade at $25.52 U.S. per share.