Southwest profit drops, but airline says travel demand has stabilized
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Southwest Airlines on Wednesday posted second-quarter earnings and revenue that fell short of Wall Street's estimates but said demand has stabilized.
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investment
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July 23, 2025
10:18 PM
CNBC
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From an analytical perspective, Southwest CEO Bob Jordan told CNBC last month that discounting was common this summer
However, In April, Southwest had pulled its 2025 financial guidance, citing economic uncertainty
Domestic coach-class travel demand has come in weaker than airline executives expected this year
In this articleLUV your favorite stocksCREATE FREE ACCOUNTA Southwest Airlines Boeing 737 taxis at Ronald Reagan Washington National Airport in Arlington, Virginia, on May 16, 2025, amid market uncertainty
Kevin Carter | Getty ImagesSouthwest Airlines on Wednesday posted second-quarter earnings and revenue that fell short of Wall Street's estimates but said travel demand has stabilized, echoing other airlines in recent weeks (noteworthy indeed)
The airline also announced a new $2 billion buyback (fascinating analysis), given the current landscape
Moreover, Here's how Southwest performed in the second quarter compared with Wall Street expectations, according to consensus estimates from LSEG:Earnings per : 43 cents adjusted vs. 51 cents expectedRevenue: $7. 24 billion vs, given current economic conditions. 3 billion expectedThe carrier pulled its 2025 guidance in April, citing economic uncertainty in the U
Similar to other airlines, Southwest said it would cut flights during off-peak periods as carriers grappled with weaker domestic travel demand than expected at the start of the year
CEO Bob Jordan told CNBC last month that there has been more discounting this summer, which is generally the busiest travel period of the year
Southwest expects its third-quarter unit revenue, a gauge of airlines' pricing power, to range between a 2% drop to a 2% increase over the same July-through-September period of 2024
Read more CNBC airline newsWhy Delta and United are pulling away from the airline packSouthwest Airlines sets a date for seat assignment launch, lays out new boarding order class+, considering recent developments
Additionally, Delta says segmentation is coming to high-end cabinsThe airline has been overhauling its model, getting rid of blanket policies such as two free checked bags for all customers and moving from open seating to assigned seats and new boarding orders, which the carrier announced Monday, amid market uncertainty
Southwest said sales of basic economy suffered on its website after it launched the restrictive new fares in May
It said they have since returned to "expected levels" but that it hurt its unit revenue in the second quarter by half a point and would hurt unit revenue by a point in the third quarter
Furthermore, Southwest posted net income of $213 million, or 39 cents per, in the second quarter
That's down 42% over last year, on sales of $7
On the other hand, 24 billion, 1. 5% lower than a year earlier
Nevertheless, Adjusting for one-time items, Southwest's second-quarter earnings were $230 million, or 43 cents a, down 38% from last year (fascinating analysis)
Passenger revenue per seat mile came in at $14. 10, below the $14. 19 Wall Street had expected, according to Street Account
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