The U.S. government shutdown impacts demand, Southwest Airlines Co. (LUV.US) lowers profit expectations.

Southwest Airlines Co. (LUV.US) saw a decline in stock price after releasing an earnings guidance update on Friday. The company stated that due to reduced revenue and increased fuel prices caused by the government shutdown, it is currently forecasting a full-year pre-tax profit of approximately $500 million for 2025, lower than the previous expected range of $600 million to $800 million. The filing submitted to the U.S. Securities and Exchange Commission did not disclose any other guidance information. Southwest Airlines Co. emphasized that following a temporary decline in demand due to the government shutdown, current booking levels have returned to previous expected levels. In pre-market trading, Southwest Airlines Co. stock fell by 1.4% to $35.30, with a 52-week trading range of $23.83 to $37.96. Earlier this week, Delta Air Lines, Inc. stated that the government shutdown caused them a loss of $200 million, but demand prospects going into 2026 appear strong. The government shutdown exacerbated the nationwide shortage of air traffic controllers, disrupting air travel. During the over 40-day shutdown, air traffic controllers were among the federal employees who had to work but were unable to receive their salaries on time. The Trump administration requested airlines to cut flight schedules and cancel flights, however, in the final days of the shutdown, flight cancellations and delays were more severe than the mandatory reduction requirements.