Southwest Airlines has lowered its 2025 earnings forecast following the recent federal government shutdown, which lasted over 40 days, making it the longest in U.S. history.
The airline now expects earnings before interest and taxes (EBIT) of roughly $500 million, down from its prior forecast of $600 million to $800 million.
The company attributed the reduction to decreased revenue during the shutdown and rising fuel costs.
“Following the temporary decline in demand related to the shutdown, bookings have returned to previous expectations,” Southwest said in a securities filing.
Delta Air Lines also reported losses from the government closure, estimating a $200 million hit, though it noted demand appears strong heading into 2026.
Travel Disruptions and Air Traffic Challenges
The shutdown had a widespread impact on travel, compounding issues caused by a nationwide shortage of air traffic controllers.
Controllers were required to work without pay during the closure, creating added strain on the already limited workforce.
The Trump administration directed airlines to reduce flight schedules to ease pressure on controllers.
Despite these measures, some disruptions exceeded the mandated cuts, leading to flight cancellations and delays in multiple regions.
The combination of diminished demand and operational challenges has pressured airline profits, forcing Southwest to revise its financial outlook.
Analysts say the situation highlights the fragility of airline operations when key federal services are interrupted.
As bookings return to pre-shutdown levels, airlines remain cautiously optimistic, balancing higher fuel costs against recovering travel demand.
