Southwest Airlines has reduced expectations for its fourth-quarter financial performance due to the US government shutdown, which suppressed air traffic at major airports for several days last month.
The Dallas-based carrier also cites higher-than-expected fuel prices in a 5 December investor update.
Now, the carrier expects to bring in about $500 million in EBIT (earnings before interest and taxes) during the October-December period, rather than its previous expectation of $600-$800 million.
”Following the temporary decline in demand related to the shutdown, bookings have returned to previous expectations,” Southwest says.
The carrier joins Alaska Airlines, Delta Air Lines and JetBlue Airways in warning of shutdown-related hits to year-end performances.
In response to a heavily strained air traffic control (ATC) system during the shutdown – which saw controllers go unpaid for weeks – the Federal Aviation Administration mandated a 10% capacity reduction at 40 of the largest US airports.
However, that 10% capacity-reduction target ultimately was never reached, as ATC staffing levels improved and the reduction rate was frozen at 6%.
The reductions began on 7 November and normal operations resumed roughly 10 days later, though some airlines were slower to ramp up operations.
Separately, earlier this week Southwest identified German leisure carrier Condor as its fifth international airline partner. The carrier has increasingly embraced airline partnerships since embarking on a major business-model overhaul following its investor day in September 2024.
Southwest now has partnerships with EVA Air, China Airlines, Condor, Icelandair and Phillipine Airlines.
