Southwest Airlines joins rivals Delta, United in cutting flights, scrapping forecasts

Core Viewpoint - Southwest Airlines has withdrawn its financial forecast due to uncertainties stemming from President Trump's trade war, marking significant challenges for the airline industry since the COVID-19 pandemic [1][4]. Industry Summary - The trade war is leading to slower economic growth and higher inflation, causing consumers and businesses to reduce travel spending [2]. - Airlines are struggling to forecast their business accurately due to unclear consumer behavior in a potentially worsening economy [4][8]. - Major US carriers, including Southwest, Alaska Air Group, Delta Air Lines, and United Airlines, have recently pulled or altered their profit forecasts due to macroeconomic uncertainties [5][6]. Company Summary - Southwest Airlines has stated it cannot reaffirm its previous earnings forecast of $1.7 billion for 2025 and $3.8 billion for 2026 due to current macroeconomic conditions [4]. - The airline's shares fell by 3% in after-hours trading following the announcement [5]. - Southwest has reported a decline in domestic leisure travel bookings and anticipates a unit revenue decrease of up to 4% compared to the previous year [9]. - The airline is facing challenges in the domestic market, which is currently the weakest travel market, leading to lower fares to stimulate demand [8]. - To adapt to softening demand, Southwest is proactively reducing capacity in the second half of the year [13]. - The company has also been revamping its business model, including plans to end open seating and introduce fees for checked bags [10][11].