Earnings Intel 3.21.25

Takeaways for CEOs from recent earnings calls and conferences, including Southwest, Visa, and Dollar General

This week’s roundup sees three legacy incumbents shaking things up to keep pace with the world around them. Each is in a battle to reshape its model for the future, whether that’s sending money on X, shrinking IRL footprints and expanding digital ones, or—yes—charging air travelers for bags.

Southwest Airlines

CEO Bob Jordan at the J.P. Morgan Industrials Conference

• The Great Bag Pivot. As I’m sure you heard, Southwest is shedding its longstanding “bags fly free” policy. Starting May 28, most fare products will incur bag fees, and the airline will introduce a basic economy fare. These moves, along with changes to flight credits and the loyalty program, aim to close the margin gap with rivals. It’s a radical cultural shift from the airline that famously resisted nickel-and-diming. “We must become more innovative, more agile and efficient in everything that we do,” said Jordan. Based on the changes, Southwest upped its targeted EBIT for 2025 from $1B to $1.8B

• Soft Revenue, But Leaner Cost Base and Strategic Capex Discipline. Southwest lowered Q1 RASM (revenue per available seat mile) guidance by 3 points (now +2% to +4% YoY), citing a soft macro environment and sluggish bookings. But they’re offsetting it with fuel tailwinds and aggressive cost discipline. 2025 CASM-X (cost per available seat mile excluding fuel and special items) now guided at +6%, down from 7-9%.

• Leveraging Loyalty. Southwest is getting serious about monetizing loyalty and improving distribution in its search for revenue. “We fell behind in revenue generation,” said Jordan. “[Our competitors] introduced a host of things we did not pursue.” A new agreement with Chase Rapid Rewards is expected to drive co-brand card growth. Meanwhile, entry into Expedia, following entry into other “metasearch” channels last year, is expected to reach new fliers.