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Southwest Airlines On Wednesday became the latest US carrier to withdraw his financial forecast as President Donald Trump’s trade war has created the greatest uncertainty for the industry since the Kovid -19 epidemic.
Airlines are struggling to properly estimate their business with a little clarity on how consumers will behave in front of the deteriorating economy.
The journey is a discretionary item for many consumers and businesses. With slow economic growth with trade war and increasing the possibility of high inflation, both tourists and corporations are sitting tight, causing a pullback to travel expenses.
South -West Airlines Boeing 737 flew from Las Vegas International Airport in Las Vegas on 8 February 2024. (Reuters / Mike Black / Reuters)
Southwest stated that it is not able to confirm its previous forecast of $ 1.7 billion in earnings in 2025 and early earnings before taxes and is about $ 3.8 billion in 2026.
“Between the present Macroeconomic uncertainty, The company said it is difficult to forecast recent more short -term booking trends.
The southwest shares were 3% below in the hourly trading.
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Alaska Air Group also forecast its 2025 profit on Wednesday, cited the prevailing macroeconomic uncertainty.
earlier this month, Delta air lines And the frontier ended his forecasts. Last week, the United Airlines gave two separate forecasts, a highly unusual step, saying that this year was impossible to predict the macro environment.
| Langer | Security | Last | Change | Change % |
|---|---|---|---|---|
| Lav | Southwest Airlines Company. | 26.16 | +0.64 |
+2.49% |
| Alk | Alaska Air Group Inc. | 41.96 | -4.28 |
-9.26% |
| Lentils | Delta Air Lines Inc. | 41.96 | +0.56 |
+1.35% |
| Ulcc | Frontier Group Holdings | 3.21 | -0.01 |
-0.16% |
| Ual | United Airlines Holdings Inc. | 68.74 | +0.71 |
+1.04% |
A delta Boeing 767 in New York on 7 February 2024. Kennedy arrives at International Airport. (Through Charlie Tribalu / AFP Getty Image / Getty Image)
This is a dramatic reverse in the fate of the American carrier, taking high flights about two months ago on a new golden age, as the demand for strong travel and tight industry-wide capacity increased the possibility of a multi-year-year-old profit boom.
It is very bad for airlines like South-West, which depend on most value-sensitive holiday customers and mainly serve the American domestic market.
The domestic market is currently the most soft travel market, with airlines to encourage demand with low fare. And consumer spending is the weakest among low -income homes.
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Southwest said the booking softened in the March quarter during the domestic holiday journey, where the airline is at greater risk than its rivals such as Delta and United.
| Langer | Security | Last | Change | Change % |
|---|---|---|---|---|
| Lentils | Delta Air Lines Inc. | 41.91 | +0.51 |
+1.23% |
| Ual | United Airlines Holdings Inc. | 68.77 | +0.74 |
+1.09% |
There are some indications that the situation has improved as the company said that its unit will decrease to a proxy – a proxy – a year ago in the current quarter to 4%.
Weakening the demand for travel is a challenge for the southwest, which is struggling to find his leg after the Kovid -19 epidemic. Its deficiency earnings have pressured to rebuild their business model.
A south -western airline aircraft leaves Phoenix. (Southwest Airlines / Fox News)
Last year, South West announced plans To end open seating, which was central for its brand image for more than 50 years. In March, it unveiled the plan to start charging customers for a check bag, ending a unique free policy.
Southwest said that it has not seen any evidence of customers digging the airline after recent policy changes. CEO Bob Jordan said that the airline is expected to start the basic economy and bag fees next month and remained assigned in the September quarter and stood on the track to start selling additional legroom seats.
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To protect its margin between softening demand, it is reducing capacity on its flights, or lowering seats in the second half of the year.
Southwest An adjusted loss reported According to LSEG data, one of the 13 cents in the first quarter, with a loss of 18 cents per share required by analysts.
The company will discuss its financial results on a call with analysts and investors on Thursday.
