Southwest Airlines Reports 53.3% Net Income Decline in First Half of 2025

Southwest Airlines Co. reported a net income of $64 million for the six months ended June 30, 2025, a significant decrease of 53.3% compared to $137 million in the same period of 2024. The company's revenue for the first half of 2025 was relatively flat at $13.67 billion, down slightly from $13.68 billion in the previous year. Passenger revenues increased marginally by 0.1% to $12.44 billion, while other revenues fell by 2.0% to $1.15 billion. The decline in profitability was attributed to rising salaries, wages, and benefits expenses, which increased by 7.2% year-over-year, alongside a notable reduction in fuel and oil expenses, which decreased by 17.7% due to lower jet fuel prices.

In the second quarter of 2025, Southwest Airlines experienced a 1.5% decline in total operating revenues, amounting to $7.24 billion, compared to $7.35 billion in the same quarter of 2024. Passenger revenues for the quarter decreased by 1.3% to $6.63 billion. The airline's operating expenses increased slightly by 0.9% to $7.02 billion, primarily driven by higher salaries and landing fees, despite a significant reduction in fuel costs. The operating income for the quarter was reported at $225 million, down 43.5% from $398 million in the prior year.

Strategically, Southwest Airlines has implemented several initiatives aimed at enhancing customer experience and operational efficiency. The company introduced a new basic fare product and updated its flight credit policy, which now includes expiration dates for certain flight credits. Additionally, Southwest has expanded its partnerships with international airlines, including a new collaboration with China Airlines set to launch in early 2026. The airline also continues to modernize its fleet, with 17 new Boeing 737-8 aircraft delivered in the second quarter of 2025, while retiring older models.

Operationally, Southwest Airlines reported a decrease in passenger counts, with 65.5 million revenue passengers carried in the first half of 2025, down 6.9% from the previous year. The airline's load factor also declined to 76.3%, reflecting a decrease in demand, particularly in domestic leisure travel. The company has reduced its workforce by approximately 1,750 positions as part of a cost-saving initiative, which is expected to yield significant savings in the coming years. As of June 30, 2025, the airline employed 72,242 full-time equivalent employees, a decrease of 2.5% from the previous year.

Looking ahead, Southwest Airlines anticipates a challenging environment with expectations of flat capacity and potential fluctuations in revenue per available seat mile (RASM). The company projects third-quarter 2025 RASM to be down 2% to up 2% year-over-year, with operating expenses per available seat mile (CASM-X) expected to rise by 3.5% to 5.5%. Despite these challenges, Southwest remains focused on achieving its cost reduction targets and enhancing operational efficiencies to improve financial performance in the latter half of 2025.