Southwest Airlines reported lower-than-expected quarterly profit and revenue due to weak demand from U.S. consumers for travel, impacted by economic uncertainty from the trade war and rising living costs. The airline saw a stabilization in domestic leisure travel demand but forecasted unit revenue to range from down 2% to up 2% in the third quarter. Southwest reported an adjusted profit per share of 43 cents in the second quarter, below analysts’ expectations of 51 cents, with operating revenue of $7.24 billion, missing the expected $7.29 billion. The company pulled its full-year financial forecast in April and provided a new target for 2025 earnings before interest and taxes of $600 million to $800 million, down from the previous forecast of $1.7 billion. Southwest has been struggling post-pandemic and introduced bag fees and basic economy fares to boost revenue, with bag fee revenue exceeding expectations but basic economy fare sales suffering. The airline expects an impact on third-quarter unit revenue and an increase in non-fuel operating costs. Despite the challenges, Southwest remains hopeful for a stronger second half of the year with improved demand and industry efforts to limit seat supply and discounting pressure. Other airlines have also reported a recovery in bookings, but the industry’s pricing power remains weak, especially in the domestic market. Southwest saw a 3% decline in unit revenue in the second quarter, with overall passenger revenue down from a year ago. The company expects flat capacity in the third quarter and will discuss its earnings with analysts on Thursday.

Read more at Yahoo Finance: Southwest Airlines earnings hit by weak US travel demand