Core Viewpoint - Southwest Airlines is facing significant challenges due to potential economic downturns, leading to a sharp decline in stock price and the withdrawal of crucial profitability guidance for 2025 and 2026 [1][6]. Company Performance - In the first quarter of 2024, Southwest Airlines reported a revenue increase of less than 2% year over year, totaling just over $6.4 billion, which was in line with analyst expectations [4]. - The company narrowed its bottom-line loss to $77 million, compared to a shortfall of $218 million in the first quarter of 2024. The non-GAAP net loss improved to $0.13 per share from $0.36, beating the consensus projection of $0.17 [5]. Industry Context - The airline industry is highly sensitive to economic conditions, particularly discretionary consumer spending, which tends to decline during recessions [2][4]. - A study by Bank of America Institute indicated a 2.5% year-over-year decrease in weekly consumer spending on lodging as of March 22, suggesting a waning post-pandemic travel demand [8]. - The potential for a recession could exacerbate the already challenging environment for the airline and tourism industries, making recovery difficult for companies like Southwest Airlines [9].