Summary by Futu AI
Southwest Airlines reported a first quarter 2025 net loss of $149 million ($0.26 per share), improving from a $231 million loss in Q1 2024. Operating revenue reached a first quarter record of $6.4 billion, up 1.6% year-over-year, driven by a 9.9% increase in passenger yield despite a 4.4 point decline in load factor. Operating expenses decreased 1.1% to $6.7 billion, primarily due to lower fuel costs offset by higher labor expenses.The company announced several strategic initiatives including introducing checked bag fees, optimizing its loyalty program, and implementing assigned seating starting in 2025. A workforce reduction of approximately 1,750 positions was initiated in February 2025, expected to generate savings of $210 million in 2025 and $300 million in 2026. The company also extended its co-brand agreement with Chase and expanded distribution through Expedia.Southwest ended the quarter with $8.3 billion in cash and short-term investments. The company returned $857 million to shareholders through $107 million in dividends and a $750 million share repurchase program. For Q2 2025, Southwest expects revenue to be flat to down 4% year-over-year with capacity up 1-2%, while maintaining its full-year 2025 capacity growth forecast of approximately 1%.
