AAL is down more than 40% this year, while LUV is off by 22%Airline stocks are in focus today, after sector stalwarts American Airlines Group Inc (NASDAQ:AAL) and Southwest Airlines (NYSE:LUV) stepped into the earnings confessional. Both airliners reported a smaller-than-expected first-quarter loss and withdrew their full-year guidance, mirroring Delta Air Lines (DAL) and United Airlines (UAL) amid an increasingly murky U.S. economic outlook. AAL was last seen up 2.5% to trade at $9.56, consolidating around ...

Core Insights - Southwest Airlines reported mixed Q1 2025 results, achieving a record operating revenue of $6.4 billion, while facing softer leisure demand and macroeconomic uncertainty [4][3][8] - The company has suspended full-year EBITDA guidance for 2025 and 2026 due to the challenging economic environment, but reaffirmed EBIT targets of $1.8 billion for 2025 and $4.3 billion for 2026 [4][10][12] - New initiatives, including basic economy and bag fees, are set to launch in May 2025, with expectations for minimal contribution in Q2 but significant ramp-up in the latter half of the year [5][11][12] Financial Performance - Q1 2025 saw a 3.5% increase in RASM (Revenue per Available Seat Mile) on record yields, while CASMx (Cost per Available Seat Mile) grew by 4.6%, outperforming previous guidance [3][10][12] - The company plans to reduce capacity growth to approximately 1% for the full year 2025, down from a previous guidance of 1%-2% [4][10] - Debt repayment of $2.6 billion is planned, including a $976 million prepayment of payroll support program notes and a $1.6 billion payoff of convertible notes [4][12] Strategic Initiatives - The company is focusing on revenue-generating initiatives, including enhancements to the Rapid Rewards program and partnerships with online travel agencies like Expedia, which have exceeded expectations [9][11][12] - Upcoming initiatives aim to improve customer experience and revenue, such as premium and assigned seating sales starting in Q3 2025 [5][11] - The company is also implementing a turn time reduction initiative to increase aircraft utilization without extending operational hours, which is expected to positively impact RASM and CASM [9][11] Market Outlook - The macroeconomic environment has led to softer booking trends, particularly in leisure travel, with guidance for Q2 RASM expected to be flat to down 4% year-over-year [4][10] - Despite the challenges, managed business travel remains stable, excluding government sector weakness, and the company is focusing growth in key markets like Nashville, Phoenix, Sacramento, and Orlando [5][10] - The company is confident in its ability to navigate the current environment due to its strong investment-grade balance sheet and unencumbered assets [12][14]

Southwest Airlines became the latest U.S. carrier on Wednesday 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. With little clarity on how consumers will behave in the face of a potentially worsening economy, airlines are struggling to accurately forecast their business.Travel is a discretionary item for many consumers and businesses. With the trade war raising the prospect of slower economic growth and ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Core Insights - Southwest Airlines reported $6.43 billion in revenue for Q1 2025, a year-over-year increase of 1.6% and a surprise of +0.40% over the Zacks Consensus Estimate of $6.4 billion [1] - The EPS for the same period was -$0.13, an improvement from -$0.36 a year ago, with a surprise of +27.78% compared to the consensus estimate of -$0.18 [1] Financial Performance Metrics - Load factor was 73.9%, below the average estimate of 81.3% [4] - CASM, excluding fuel and oil expenses, was 12.81 cents, slightly better than the average estimate of 12.99 cents [4] - Available seat miles (ASMs) were 41.43 billion, slightly above the average estimate of 41.32 billion [4] - Revenue passenger miles (RPMs) were 30.63 billion, significantly below the average estimate of 33.52 billion [4] - Revenue Per Available Seat Mile (RASM) was 15.51 cents, close to the average estimate of 15.53 cents [4] - Passenger revenue per ASM (PRASM) matched the estimate of 14.02 cents [4] - Passenger revenue yield per RPM was 18.97 cents, exceeding the average estimate of 17.3 cents [4] - Fuel consumed was 500 million gallons, slightly below the estimate of 502.23 million gallons [4] - Fuel costs per gallon were $2.49, lower than the average estimate of $2.51 [4] - Operating Revenues from Passenger were $5.81 billion, slightly above the average estimate of $5.80 billion, representing a +1.7% year-over-year change [4] - Operating Revenues from Other were $576 million, below the average estimate of $587.23 million, with a +0.2% year-over-year change [4] - Operating Revenues from Freight were $41 million, below the average estimate of $46.16 million, representing a -2.4% year-over-year change [4] Stock Performance - Shares of Southwest Airlines have returned -28.6% over the past month, compared to the Zacks S&P 500 composite's -6.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

LAS VEGAS, NEVADA - MARCH 15: A Southwest Airlines Boeing 737 airplane departs from Harry Reid International Airport as another airplane taxis on March 15, 2025 in Las Vegas, Nevada. (Photo by Kevin Carter/Getty Images)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 i ...

DALLAS, April 23, 2025 /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) (the "Company") today reported its first quarter 2025 financial results:   Net loss of $149 million, or $0.26 loss per diluted share Net loss, excluding special items1, of $77 million, or $0.13 loss per diluted share Record first quarter operating revenues of $6.4 billion on all-time record yields Liquidity2 of $9.3 billion, well in excess of debt outstanding of $6.7 billionBob Jordan, President, Chief Executive Officer, & Vice Chairm ...

SOUTHWEST AIRLINES REPORTS FIRST QUARTER 2025 RESULTS DALLAS, TEXAS - April 23, 2025 - Southwest Airlines Co. (NYSE: LUV) (the "Company") today reported its first quarter 2025 financial results: Bob Jordan, President, Chief Executive Officer, & Vice Chairman of the Board of Directors, stated, "While the broader economic environment has been dynamic, we remain focused on executing our transformational plan. On costs, we beat our previously adjusted guidance and are on track to achieve the increased cost redu ...

Industry Overview - The Zacks Transportation sector is facing challenges from persistent inflation, tariff-induced economic uncertainties, and supply-chain disruptions [1][2] - A downturn in the freight market due to excess capacity relative to freight volumes has severely impacted the sector [1] Economic Factors - Inflation concerns and geopolitical tensions are dampening the prospects for stocks in the transportation sector, leading to increased market volatility [2] - Supply-chain issues are expected to keep costs high in the near future [2] Positive Developments - Low fuel costs resulting from declining oil prices are acting as a tailwind for the transportation sector, potentially supporting bottom-line growth for companies [3] Company Earnings Expectations - Investors are awaiting earnings results from Westinghouse Air Brake Technologies (WAB), Old Dominion Freight Line (ODFL), Union Pacific Corporation (UNP), and Southwest Airlines Co. (LUV) [4] Westinghouse Air Brake Technologies (WAB) - The Zacks Consensus Estimate for WAB's revenues is $2.60 billion, indicating a 4% growth year-over-year, driven by strong performance in the Freight and Transit segments [6] - The earnings estimate for WAB has been revised upward by 1.01% to $2.01 per share, but the model does not predict an earnings beat due to an Earnings ESP of -2.19% [7] Old Dominion Freight Line (ODFL) - ODFL's revenue is expected to be $1.37 billion, reflecting a 6.3% decrease year-over-year, impacted by weak freight demand and high inflation [9] - The earnings estimate for ODFL has been revised downward by 0.9% to $1.15 per share, indicating a 14.2% decline from the previous year [9][10] Union Pacific Corporation (UNP) - The revenue estimate for UNP is $6.09 billion, showing a 0.9% increase year-over-year, while the earnings estimate has been revised downward by 2.15% to $2.73 per share [11][12] - UNP's performance is expected to be negatively affected by the freight market downturn and a soft consumer market [12] Southwest Airlines (LUV) - LUV is projected to achieve revenues of $6.40 billion, indicating a 1.16% growth year-over-year, supported by effective revenue management strategies [13] - The earnings estimate for LUV is a loss of 18 cents per share, which is wider than the previous estimate but represents a 50% improvement from the year-ago loss [14]

Southwest Airlines Co. (LUV) is scheduled to report first-quarter 2025 results on April 24, 2025. LUV has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the preceding four quarters, missed the mark in the remaining quarter, the average beat being 58.64%. (See the Zacks Earnings Calendar to stay ahead of market-making news).Image Source: Zacks Investment ResearchLet’s see how things have shaped up for LUV this earnings season.Factors Likely to Have Influenc ...