(Reuters) -Southwest Airlines missed Wall Street estimates for second-quarter profit on Wednesday, pressured by weak domestic travel demand that has led to more empty seats and softer fares.
Shares of the carrier were down 2% in aftermarket trading.
The budget carrier reported an adjusted profit per share of 43 cents, compared with analysts’ average expectations of 51 cents, according to data compiled by LSEG.
In April, several major U.S. carriers scrapped their financial forecasts, citing uncertainty linked to President Donald Trump’s broad tariff measures and government spending cuts, which pressured consumers to scale back travel plans.
Since then, airline executives and analysts have signaled that demand trends and the broader travel environment are showing signs of steadiness.
Even so, the domestic market remains under pressure, with cost-conscious travelers continuing to exercise caution as household budgets tighten.
Summer, typically the peak money-making season for airlines, is falling short this year as sluggish demand for standard economy seats forces carriers to cut fares, undermining their pricing power.
Delta Air Lines and United Airlines have seen strong revenue gains from premium cabins, buoyed by affluent travelers willing to pay for upgrades.
By contrast, low-cost carriers such as Southwest, which relies heavily on standard economy seats, are under pressure to maintain profitability as price-sensitive travelers remain cautious with discretionary spending.
Southwest reported operating revenue of $7.24 billion in the quarter through June, compared with $7.35 billion a year earlier.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Anil D’Silva)
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