By Rajesh Kumar Singh
CHICAGO (Reuters) -Southwest Airlines pulled its profit outlook for 2025 and 2026 on Wednesday, citing the current macroeconomic uncertainty.
The Texas-based airline’s shares were down about 4% in after-hours trading.
Southwest had previously forecast $1.7 billion in earnings before interest and taxes this year and about $3.8 billion for next year.
“Amid the current macroeconomic uncertainty, it is difficult to forecast given recent and short-lived booking trends,” the company said.
Southwest is the latest airline to withdraw its financial forecast as President Donald Trump’s trade war has created the biggest uncertainty for the industry since the COVID-19 pandemic.
Delta Air Lines and Frontier this month pulled their forecasts. Last week, United Airlines gave two different forecasts, a highly unusual move, saying it was impossible to predict the macro environment this year.
As travel is a discretionary item for many consumers and businesses, the deteriorating economic outlook has led to a pullback in travel spending.
In a reflection of weak demand, Southwest said its unit revenue – a proxy for pricing power – would decline as much as 4% from a year ago in the current quarter.
To protect its margins, the company said it is proactively reducing capacity, or seats on its flights, in the second half of the year.
As a result, its full-year capacity will now be up roughly 1% from a year ago. Earlier, it had said 2025 capacity would be up 1% to 2%.
Southwest reported an adjusted loss of 13 cents a share in the first quarter compared with a loss of 18 cents per share expected by analysts, according to LSEG data.
The company will discuss its financial results on a call with analysts and investors on Thursday.
(Reporting by Rajesh Kumar Singh; Editing by Chris Reese and Bill Berkrot)
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