Southwest Airlines reports stable demand amid earnings slump

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Global Industry News

Southwest Airlines reports stable demand amid earnings slump

Policy

Bob Jordan President, Chief Executive Officer, & Vice Chairman of the Board of Directors at Southwest Airlines | Southwest Airlines

By Sky Industry News

Jul 30, 2025

Southwest Airlines has announced that travel demand has stabilized despite reporting lower-than-expected earnings and revenue for the second quarter. The airline's Board of Directors approved a new $2 billion share buyback program to be completed over the next two years.

Earlier this year, Southwest withdrew its 2025 forecast due to economic uncertainties in the United States and decided to reduce flights during off-peak times. The company anticipates a slight fluctuation in third-quarter unit revenue compared to last year, ranging from a 2% decrease to a 2% increase.

The airline recently introduced changes including bag fees and a basic economy product structure. Bob Jordan, President, Chief Executive Officer, & Vice Chairman of the Board of Directors, stated: "We continued to make meaningful progress against our transformational plan in second quarter... These initiatives are coming online quickly, and we are pleased with performance thus far."

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Southwest's second-quarter net income was $213 million USD or $0.43 per share, below Wall Street's forecast of $0.51 per share. This represents a 42% decrease from last year's earnings.

In efforts to increase revenue and compete with other airlines, Southwest has eliminated open seating and free checked bags. Passengers now have assigned seats with options for standard, preferred, and extra-legroom choices. Checked baggage fees have been introduced as well.

These changes have sparked negative reactions from customers who feel the airline is losing its low-cost identity. However, Southwest continues to survey customers as it navigates these major adjustments.

Founded by Herb Kelleher and Rollin King in 1967 at Dallas Love Field, Southwest Airlines became known for low fares and minimal amenities. It grew significantly after deregulation in 1978 and remains the largest domestic carrier in America today.