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Southwest struggles with costs, pulls its 2025 outlook on tariff uncertainty

All the big four airlines have now reported first-quarter results, but none of them know what their futures will look like.

Max Knoblauch

4/24/25 8:51AM

Shares of Southwest Airlines slipped more than 3% premarket as the company posted a first-quarter loss and said its nonfuel costs were rising.

In its last full quarter with its famous “bags fly free” policy, Southwest reported revenue of $6.43 billion, above analyst estimates of $6.39 billion. The carrier posted a loss of $0.13 a share, better than the loss of $0.18 expected by analysts.

Despite a slew of cost-cutting measures since it ceded five board seats to activist investor Elliott Management in October, Southwest reported that its nonfuel costs rose 4.6% in the first quarter. The carrier expects those costs to rise between 3.5% and 5.5% in the current quarter. Beginning May 28, all passengers purchasing tickets will have to pay an as yet undefined fee for checked luggage.

Like most of its rivals, Southwest also pulled its financial outlook for the year, saying it would not reiterate its guidance for full-year 2025 or 2026 adjusted earnings.

“Amid the current macroeconomic uncertainty, it is difficult to forecast given recent and short-lived booking trends,” the airline said.

As tariffs hit air travel, airlines like Delta Air Lines and Frontier Airlines have pulled their full-year guidance, while United Airlines instead opted for the bold strategy of issuing dual forecasts (one for a recession and one for a normal year). American Airlines, which reported Thursday morning, opted to yank its guidance as well.

With investors fearing a tariff-y travel slump, the big four airlines, which collectively control 80% of the US market, have shed more than $32 billion in market cap so far this year as of Wednesday’s close.

Southwest bag revenue - Chartr — Southwest is finally looking to cash in on customers checking bags. Passenger volume vs baggage revenue: Chartr

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Electronic Arts launches a platform to put more ads in its games

Video game publishing giant EA launched a new platform on Monday designed to make the process of selling immersive ad space in its popular games easier.

The company says the platform, called EA Advertising, allows brands to “integrate directly into gameplay through dynamic, real-time placements, from stadium signage to custom in-game content.”

More so than other studios, EA has incorporated advertising into its most popular titles. As Kotaku points out, the company’s ad efforts stretch as far back as 2006. Several of its sports franchises already feature partnerships with brands like Visa, Lowe’s, Red Bull, and PepsiCo.

In-game advertising hasn’t exactly been embraced by fans, but industry experts expect it to ramp up as companies seek more revenue to offset higher games budgets and surging memory costs. EA rival Take-Two has taken a different approach, with CEO Strauss Zelnick recently saying the company was “not at risk of doing brand partnerships” in the forthcoming “Grand Theft Auto VI,” and that ads in full-price games seems “unfair.”

The $55 billion deal to take EA private, led by Saudi Arabia’s Public Investment Fund, is set to close at the end of this month. Being the largest leveraged buyout in history, EA will likely look for more ways to boost revenue to cover interest payments.

Electronic Arts Makes Push for Ad Dollars Tied to Sports

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JM Smucker says it sold $1 billion worth of Uncrustables in FY2026

After years of booming sandwich sales, JM Smucker has finally earned a billion-dollar crust.

On Tuesday, the company reported results for fiscal year 2026, highlighting better-than-expected profits driven by higher prices for coffee and sweet baked goods. However, at another point on the earnings call, CEO Mark Smucker pointed to one particularly jammy figure: in line with previous forecasts, the company sold $1 billion worth of its (almost always) crustless sandwiches, Uncrustables, in the last year alone.

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Paramount reportedly offers concessions to resolve multistate antitrust investigation

Paramount has reportedly offered up some concessions in an effort to prevent an antitrust lawsuit by California and about 10 other states, according to Bloomberg reporting on Monday.

Reuters first reported on the potential suit from a group of unnamed states last week, which could throw a wrench in Paramount’s plans to buy rival Warner Bros. Discovery in a Hollywood megamerger.

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

Paramount Offers Concessions to Head Off State Antitrust Lawsuit

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

$98B ⛽

Max Knoblauch6/8/26

The IATA released its latest financial outlook for the airline industry over the weekend, forecasting a $98 billion jump in the sector’s collective fuel bill. The world’s largest trade group representing airlines expects the oil spike to halve profits by 49% from last year to $23 billion.

The group also expects profit margins to halve year over year, falling from 2025’s 4.2% to 2%. Still, revenue is expected to climb to $1.17 trillion from $1.07 trillion.

A surge in the cost of jet fuel has rocked US and global airlines this year, leading Delta Air Lines, United Airlines, American Airlines, Southwest Airlines, JetBlue, and others to raise fares and ancillary charges like bag fees. Low-cost carriers, which operate on smaller margins, have been squeezed the hardest, resulting in Spirit’s shutdown.

“It’s a tough year for all airlines, especially those whose balance sheets had not yet recovered from COVID. And, of course, for those operating in the Gulf,” said IATA Director General Willie Walsh, who added that demand is holding up and about half of passengers expect to spend more on travel this year. “That bodes well for a strong northern summer peak season. The big unknown is how long travelers and shippers can tolerate the higher costs of connectivity.”

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