Southwest Airlines Slashes Full-Year Profit Forecast After Federal Shutdown Impact

One of the largest carriers in the US, Southwest Airlines, on Friday made changes to its 2025 financial forecasts, stating that factors such as the US Federal Government Shutdown and its subsequent impacts, along with increased fuel prices, have negatively impacted the airline’s revenue during the past two months. The airline’s share prices have also gone down.

However, it is not just Southwest that has adjusted its forecast to take the impacts of the government shutdown into consideration, as other major carriers within the United States have also taken a similar approach and adjusted their Q4 forecasts.

Adjusted Forecasts For The Full-Year

American low-cost carrier, Southwest Airlines, on Friday adjusted its forecast for the entire 2025 financial year to take into consideration the widespread impact of the 43-day Federal Government Shutdown in the US. During this period, the already understaffed key locations, such as airport control towers, faced further reduction in workforce, along with reductions at TSA and security personnel across multiple airports, which gave rise to significant disruptions, especially in the US domestic aviation market.

Additionally, to ensure safety, the Federal Aviation Administration (FAA) had mandated flight reductions of 10% across 40 of the country’s major airports, which resulted in the airline having to cancel several flights and provide associated refunds to affected passengers. Data published by Reuters indicate that Southwest, taking all these factors into consideration, has adjusted its 2025 forecast to show that it now expects the full-year revenue before interest and tax to be around $500 million, down from the previously forecasted range of $600 million to $800 million (expected reduction of 16.7% to 37.5%).

Analysts from Wall Street reportedly expect the fourth-quarter profits for US airlines to be down by approximately 30% due to the impacts of the shutdown and severe winter weather experienced in some parts of the country.

Simple Flying has reached out to Southwest. Any response received will be updated in this article.

Other US Carriers Have Been Impacted Too

With the aforementioned FAA mandate for flight reduction, data published by AeroTime indicate that over 10,000 flights were canceled between November 7 and November 16, across 40 major airports in the country. This naturally results in multiple airlines being impacted by this issue, therefore having a negative impact on their finances. Additionally, it is reported that around 5.2 million passengers were impacted during this period, due to significant delays and rolling flight cancellations.

As such, it is not surprising that another major US carrier, Delta Air Lines, has also stated that its financial numbers will be noticeably down, with the airline expecting a $200 million reduction to its pre-tax profit for Q4 of 2025, while another American carrier, JetBlue, is expecting one one-point reduction to its Available Seat Mile (ASM) growth during this quarter.

Other carriers, such as United Airlines and American Airlines, have also been impacted, but they have not specified the financial impact yet. However, airlines such as Delta have reported that bookings are now back to normal and the carrier is expecting a strong December, with the airline even seeing a 3% increase in its share on Thursday.

Strong 2026 Network Growth For The Big Four

As the airlines recover from the impacts of the government shutdown, the carriers are expecting a strong 2026 and thus, each of the four big US carriers – American, Delta, Southwest, and United, have all announced considerable network expansion plans for the coming year.

Southwest has announced multiple routes to Honolulu, Hawaii, from multiple points across the West Coast, such as Burbank, Seattle, Portland, and more, while also announcing routes to Anchorage, Alaska, all of which are expected to be launched around or during Summer 2026. United, on the other hand, announced its intention to launch services to four European destinations from its hub in Newark (EWR) after teasing the launch on social media.

On the other hand, American Airlines has announced six new routes across Europe and South America for summer 2026, including destinations such as Prague, Budapest, Buenos Aires, and more, while Delta, among other destinations, has announced its plans to launch service to Riyadh, Saudi Arabia, by Winter 2026, marking the airline’s return to a GCC destination since its exit from Dubai in 2017. Ultimately, despite the complications and disruptions across the domestic market, the four largest US carriers are expecting a strong 2026 and have prepared for their network and fleet growth.