Southwest Airlines Shares Fall as CFO Warns Air Travel Demand Weakens

Southwest Airlines' shares declined following statements from CFO Tom Doxey highlighting continued weakness in air travel demand without signs of recovery, particularly impacting main cabin leisure travel. The airline expects unit revenue to fall further in the second quarter compared to the first, despite anticipating potential upside in Boeing plane deliveries. CEO Bob Jordan described the current market as resembling a recession, noting consumer pullback amid economic uncertainty. Southwest has also introduced fees for checked bags starting May 2025, while continuing to offer benefits to select loyalty members, as part of efforts to manage costs amid pressures including activist investor demands. Despite revenue challenges, Southwest projects strong earnings before interest and taxes (EBIT) for 2023 and 2024, with a consensus analyst rating of 'Hold' and mixed price target estimates indicating moderate downside risk but also some potential long-term upside. Overall, the airline remains cautious on near-term demand but optimistic on longer-term financial performance.