Southwest reported lower quarterly profits and revenue on Wednesday but said travel demand is stabilizing after a difficult start to 2025.
The airline reported net income of $230 million, or 43 cents per share, down from $370 million, or 58 cents per share, in the second quarter of 2024. Revenue declined from $7.35 billion to $7.24 billion over the same interval.
Southwest pulled its full-year guidance in April as tariffs announced by the Trump administration rattled the global airline industry. U.S. carriers saw weakened demand for months as business and leisure travelers rethought their plans.
But after that rocky start, domestic leisure travel has largely stabilized, the airline said, setting the stage for a sunnier second half of 2025.
“While early, recent industry demand shows signs of improvement off of depressed second quarter 2025 levels, which combined with moderated capacity across the industry and Southwest-specific initiatives, creates a constructive backdrop for the second half of the year,” Southwest officials said.
The carrier also announced a $2 billion share buyback program, expected to be completed over the next two years.
Southwest is stepping away from its former low-cost model and altering many of its longstanding policies in an effort to boost profitability and better compete with legacy airlines like United, Delta, and American. It recently began charging for checked bags and will implement assigned seating in January 2026, with options for seats with extra legroom.
Airline officials said the new bag fees have generated more revenue than initially expected.
