Southwest Airlines (LUV) has cut its 2025 earnings forecast, citing a demand dip during the U.S. government shutdown in Washington, D.C., this autumn, along with higher fuel costs.
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The Dallas, Texas-based carrier said it now expects 2025 earnings of about $500 million, down from a previous forecast of $600 million to $800 million. “Following the temporary decline in demand related to the shutdown, bookings have returned to previous expectations,” Southwest said in a filing with the U.S. Securities and Exchange Commission (SEC).
Earlier this week, competitor Delta Air Lines (DAL) said the government shutdown in October would cost it $200 million, but added that demand looks strong heading into 2026. The shutdown in Washington, which was the longest ever, disrupted travel as air traffic controller shortages worsened across the U.S.
Southwest’s Schedule Cut
During the government shutdown, the Trump administration required airlines, including Southwest, to cut their schedules and cancel flights, citing increased pressure on the air traffic control system. This led to a raft of cancellations by air travelers during the government shutdown.
The U.S. government shutdown disrupted air travel as air traffic controller shortages worsened across America. Air traffic controllers were among the federal workers required to work despite not receiving regular paychecks during the shutdown. Many controllers called in sick or refused to work without pay.
Is LUV Stock a Buy?
Southwest Airlines’ stock has a consensus Hold rating among 12 Wall Street analysts. That rating is based on two Buy, eight Hold, and two Sell recommendations issued in the last three months. The average LUV price target of $34.33 implies 9.79% downside from current levels.
