Track market-moving stories before they get noisy

Weekly Market HighlightsThe U.S. stock market experienced significant challenges this week, with 594 stocks gaining more than 15% while 2,713 stocks declined,

Southwest Airlines Co. (LUV) Q3 2026 Earnings Call October 22, 2026 10:00 AM EDT

Company Participants

Danielle Collins - Managing Director of Investor Relations
Robert Jordan - President, CEO & Vice Chairman of the Board
Justin Jones - Executive VP & Chief Commercial Officer
Tom Doxey - Executive VP & CFO
Anthony Roach - Executive VP and Chief Customer & Brand Officer
Andrew Watterson - Chief Operating Officer

Conference Call Participants

Jamie Baker - JPMorgan Chase & Co, Research Division
Catherine O'Brien - Goldman Sachs Group, Inc., Research Division
Duane Pfennigwerth - Evercore ISI Institutional Equities, Research Division
Conor Cunningham - Melius Research LLC
Sheila Kahyaoglu - Jefferies LLC, Research Division
Michael Linenberg - Deutsche Bank AG, Research Division
Thomas Fitzgerald - TD Cowen, Research Division
John Godyn - Citigroup Inc., Research Division
Savanthi Syth - Raymond James & Associates, Inc., Research Division
Christian Wetherbee - Wells Fargo Securities, LLC, Research Division
Scott Group - Wolfe Research, LLC
Brandon Oglenski - Barclays Bank PLC, Research Division
Andrew Didora - BofA Securities, Research Division
Ravi Shanker - Morgan Stanley, Research Division
Atul Maheswari - UBS Investment Bank, Research Division

Presentation

Operator

Hello, everyone, and welcome to the Southwest Airlines Third Quarter 2026 Earnings Conference Call. My name is Gary, and I'll be moderating today's call. Please note that this call is being recorded. A replay of today's call will be available in the Investor Relations section of southwest.com. [Operator Instructions]

At this time, I would like to turn the call over to Danielle Collins, Managing Director of Investor Relations. Danielle, please go ahead.

Danielle Collins
Managing Director of Investor Relations

Thank you. Hello, everyone, and welcome to Southwest Airlines Third Quarter 2026 Earnings Call. In just a moment, we'll share our prepared remarks, after which we'll move into Q&A. Joining me today are Bob Jordan, our President and Chief Executive Officer; Justin Jones, our Chief Commercial Officer; and rounding that out, Tom Doxey, our Chief Financial Officer.

On its third quarter of 2026 earnings call, held on Oct. 22, 2026, Southwest Airlines (LUV +4.30%) announced that its commercial initiatives delivered record revenue. The company's commercial transformations are expanding operating margins. These structural changes position the airline for long-term profit growth. Three key takeaways from management explain how the business is evolving.

1. Network Realignment Enhances Commercial EconomicsReallocating flight capacity into core hubs strengthens customer demand while improving route economics across the system.

By concentrating our network where we can win, and giving customers more choice in how they travel with us, we are attracting more customers, increasing engagement, improving the economics of those markets.
-- Justin Jones, Chief Commercial Officer2. Loyalty Ecosystem Expansion Drives Customer RetentionDeveloping a new premium tier for Rapid Rewards, the airline's customer loyalty program, elevates engagement across both frequent and casual travelers.

The improvements to the day of travel experience that we are making, those are huge retention and acquisition levers for us. And then the hook that we have just made into the Rapid Rewards program really engaged members on the more infrequent side of the scale all the way up to our most engaged customers.
-- Anthony Roach, Executive Vice President and Chief Customer and Brand Officer3. Active Fleet Monetization Secures Low-Cost CapitalRetiring older aircraft and completing sale-leasebacks, where the company sells planes and leases them back, generates cash flow to offset capital spending for new jets.

Aircraft sales are a cash story. So you have got a ton of embedded value in the existing fleet.
-- Tom Doxey, Chief Financial OfficerLooking AheadUnit revenue set an all-time record in the third quarter, and executive leaders are channeling momentum into operational execution. The airline retains key competitive advantages through its point-to-point network efficiency, investment-grade balance sheet, and flexible fleet model. Management is maintaining pricing discipline and focusing on on-time performance improvements as key priorities.

The initiatives we have implemented across the business are creating a more resilient earnings profile and helping us perform through a wider range of operating environments.
-- Tom Doxey, Chief Financial OfficerAs commercial enhancements take effect through 2027, management is focusing on executing multiyear financial targets. Executive leadership aims to build durable earnings power across changing economic cycles.

Our third quarter performance and fourth quarter outlook both demonstrate that the earnings power we have built is durable.
-- Robert E. Jordan, President and Chief Executive OfficerThe Motley Fool recommends Southwest Airlines. The Motley Fool has a disclosure policy.

CNBC's Phil LeBeau and Southwest Airlines CEO Bob Jordan joins 'Squawk Box' to discuss the company's quarterly earnings results, impact of higher jet fuel costs, travel demand outlook, and more.

For the quarter ended September 2026, Southwest Airlines (LUV - Free Report) reported revenue of $8.42 billion, up 21.2% over the same period last year. EPS came in at $0.66, compared to $0.11 in the year-ago quarter.

The reported revenue compares to the Zacks Consensus Estimate of $8.27 billion, representing a surprise of +1.89%. The company delivered an EPS surprise of +8.2%, with the consensus EPS estimate being $0.61.

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.

As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.

Here is how Southwest performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

Load factor: 79.8% versus 82.3% estimated by five analysts on average.Available seat miles (ASMs): 45.39 billion compared to the 45.47 billion average estimate based on four analysts.CASM, excluding Fuel and oil expense and special items: 12.82 cents compared to the 12.83 cents average estimate based on four analysts.Passenger revenue per ASM (PRASM): 17.08 cents versus the four-analyst average estimate of 16.47 cents.CASM, excluding Fuel and oil expense, special items, and profit sharing expense: 12.68 cents versus the four-analyst average estimate of 12.64 cents.Revenue Per Available Seat Mile (RASM): 18.55 cents versus the four-analyst average estimate of 18.17 cents.Revenue passenger miles (RPMs): 36.21 billion compared to the 37.67 billion average estimate based on four analysts.Passenger revenue yield per RPM: 21.41 cents versus the three-analyst average estimate of 19.76 cents.Fuel costs per gallon, including fuel tax: 3.92 $/gal versus 3.52 $/gal estimated by three analysts on average.Operating Revenues- Passenger [$M]: $7.75 billion compared to the $7.5 billion average estimate based on five analysts. The reported number represents a change of +22.8% year over year.Operating Revenues- Other: $621 million compared to the $705.66 million average estimate based on five analysts. The reported number represents a change of +4.6% year over year.Operating Revenues- Freight [$M]: $48 million compared to the $54.08 million average estimate based on five analysts. The reported number represents a change of +14.3% year over year.View all Key Company Metrics for Southwest here>>>

Shares of Southwest have returned -5.8% over the past month versus the Zacks S&P 500 composite's +1% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.

Record third quarter operating revenue and all-time record unit revenues

Expanded margins year-over-year despite significant fuel headwind

Announced Southwest Icon Lounge™ network

Will host a Capital Markets Day in New York City on March 2, 2027

, /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) today reported third quarter 2026 financial results, reflecting strong demand for the Southwest product and continued momentum across the business.

"Customers are responding to the enhanced Southwest offering, and it shows in our results. Demand remained strong as we lapped last year's bag fee and other commercial initiatives, reinforcing our belief that the earnings power we've built is durable, even with significantly higher fuel costs.

"With the transformation complete, our efforts have shifted to optimizing the business and delivering the next set of Customer Experience enhancements, both focused on unlocking the next phase of value creation. Robust demand has continued in the fourth quarter, and we are seeing encouraging progress across our product and loyalty initiatives. We remain confident in our ability to further strengthen earnings, improve returns, and expand margins over time.

"We look forward to sharing our multi-year financial framework, the targets we are managing toward, and our path to achieving them at our Capital Markets Day in New York City on March 2, 2027," said Bob Jordan, Southwest Airlines President & Chief Executive Officer.

Highlights:

Net income of $270 million, or $0.55 diluted EPS, adjusted net income¹ of $328 million, or $0.66 adjusted EPS¹ Operating revenues of $8.4 billion, up 21.2%, a third quarter Company record Unit revenues increased 21.6%, exceeding prior guidance, achieving an all-time record Operating margin of 4.5%, up 4.0 points year-over-year; adjusted operating margin¹ of 5.4%, up 4.8 points year-over-year despite an $821 million increase in nominal fuel costs Returned $176 million to Shareholders through dividends Record third quarter passenger revenue and the highest passenger yield in the Company's history Managed business revenue reached a third quarter record, with 20 of the 50 all-time top managed business booking days occurring during the quarter Announced enhancements to the Rapid Rewards® program, including a new Platinum tier, a faster path to status through card spend, new Milestone Rewards, and new loyalty redemption partners Announced plans to launch the Southwest Icon Lounge™ network, the Company's first airport lounges, with the first guests expected in 2027 Became the first U.S. airline to make flight shopping available through ChatGPT Enhanced Southwest Business with the introduction of Business Priority and NDC connectivity, making it easier for corporate Customers to access and book Southwest products and services Welcomed TAP Air Portugal and LOT Polish Airlines as Southwest's tenth and eleventh airline partners Continued installation of Starlink ultra-fast WiFi across all aircraft, with fleet-wide installation expected to be complete in fall 2027 Guidance and Outlook:
The following tables provide guidance for fourth quarter and full-year 2026. The Company's guidance is based on the forward fuel curve as of October 15, 2026 and assumes the current fare environment and demand trends remain broadly intact.

4Q 2026 Forecast

Adjusted EPS1,2

$0.55 to $0.80

ASMs (a), year-over-year

3% to 4%

RASM (b), year-over-year

19% to 21%

CASM-X (c), year-over-year1,2                         

4.0% to 4.5%

2026 Forecast

Adjusted EPS1,2

$2.60 to $2.85

(a) Available seat miles ("ASMs" or "capacity").

(b) Operating revenue per available seat mile ("RASM" or "unit revenues").

(c) Operating expenses per available seat mile, excluding aircraft fuel and related taxes expense, special items, and profit sharing ("CASM-X").

Revenue:

Record third quarter 2026 operating revenues of $8.4 billion, up 21.2 percent year-over-year Third quarter 2026 RASM reached an all-time record, increasing 21.6 percent year-over-year, on capacity down 0.4 percent Fourth quarter 2026 RASM is expected to increase between 19% and 21% year-over-year Costs:

Third quarter 2026 operating expenses increased 16.3 percent year-over-year to $8.0 billion; operating expenses excluding special items¹ increased 15.4 percent year-over-year to $8.0 billion Third quarter 2026 operating expenses, excluding aircraft fuel and related taxes expense, special items, and profit sharing1, increased 3.4 percent year-over-year Third quarter 2026 CASM-X1 increased 3.8 percent year-over-year Fourth quarter 2026 CASM-X1,2 is expected to increase between 4.0% and 4.5% year-over-year, which includes an expected 1.0 point headwind from the removal of six seats from the Boeing 737-700 fleet to enable extra legroom seating Fuel:

Third quarter 2026 fuel cost was $3.92 per gallon, above prior assumptions of $3.70 to $3.75 per gallon. Fuel expense increased by $821 million compared to the third quarter of 2025 and represented a $1.08 headwind to adjusted EPS Fourth quarter 2026 fuel cost per gallon is assumed to be approximately $4.553 based on the forward curve as of October 15, 2026 Capacity, Fleet, and Capital Spending:

Third quarter 2026 capacity decreased 0.4 percent year-over-year Received 20 Boeing 737-8 aircraft and retired 20 aircraft in third quarter 2026, ending the quarter with 803 aircraft (retirements included the sale of three Boeing 737-800 aircraft and the retirement of 17 Boeing 737-700 aircraft) Third quarter 2026 gain on sale of $214 million, including $96 million primarily from retiring aircraft and engine sales and $118 million from sale-leaseback transactions Third quarter 2026 gross capital expenditures were $1.0 billion, driven primarily by aircraft-related capital spending, as well as technology, facilities, and operational investments Expect a total of 67 Boeing 737-8 and 737-7 aircraft deliveries and plan to retire approximately 60 aircraft in 2026 Entered 2026 with a disciplined capacity plan and now expect full-year growth of approximately 1.2%, versus last updated guidance of approximately 1.5% Expect 2026 net capital spending4 between $2.5 billion and $2.75 billion Liquidity and Capital Deployment:

Ended third quarter 2026 with $5.6 billion in liquidity, comprised of $3.6 billion in cash and cash equivalents and a revolving credit line of $2.0 billion Ended the quarter with gross leverage1 of 1.9x Have unencumbered aircraft and other related assets with a net book value of approximately $15.8 billion Distributed $176 million in dividends during third quarter 2026 $450 million remains outstanding under the Company's $2.0 billion share repurchase authorization Conference Call:
Southwest will discuss its third quarter 2026 results on a conference call at 10:00 a.m. Eastern Time on October 22, 2026. To listen to a live broadcast of the conference call, please go to https://www.investors.southwest.com.

Footnotes
1See Note Regarding Use of Non-GAAP Financial Measures for additional information on special items. In addition, information regarding special items is included in the accompanying table Reconciliation of Reported Amounts to Non-GAAP Items (also referred to as "excluding special items").
2Projections do not reflect the potential impact of special items and/or Aircraft fuel and related taxes expense, special items, and profit sharing because the Company cannot reliably predict or estimate those items or expenses or their impact to its financial statements in future periods, particularly given the unusual or infrequent nature of special items and especially considering the significant volatility of the Aircraft fuel and related taxes expense line item. Accordingly, the Company believes a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures for these projected results is not meaningful or available without unreasonable effort.
3Based on market prices as of October 15, 2026. Fuel cost per gallon includes fuel taxes and fuel hedging net premium expense of $0.05 per gallon related to terminated fuel derivative contracts.
4Net capital expenditures include the impact of aircraft sales and sale-leaseback transactions.

Throughout this press release, certain columns and rows may not calculate precisely to the reported totals due to the use of rounded numbers.

Cautionary Statement Regarding Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements related to (i) the Company's financial outlook, expectations, plans, targets, and projected results of operations, including with respect to earnings power and margin expansion; (ii) the Company's initiatives, strategic priorities, focus areas, core strengths, goals, and opportunities, including with respect to product offering enhancements; (iii) the Company's expectations with respect to demand, competitive positioning, and Customer response to its product offering; (iv) the Company's capacity plans and expectations; (v) the Company's expectations with respect to fuel costs and fuel efficiency; (vi) the Company's fleet plans and expectations, including with respect to the Company's fleet order book, fleet upgrades and modernization, fleet transactions, fleet deliveries and retirements; (vii) the Company's plans, estimates, and assumptions related to capital spending; and (viii) the Company's plans, expectations, and targets with respect to its investment-grade balance sheet, liquidity, leverage, and share repurchases and other Shareholder returns. These forward-looking statements are based on the Company's current estimates, intentions, beliefs, expectations, goals, strategies, and projections for the future and are not guarantees of future performance. Forward-looking statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) the impact of geopolitical conflicts, fears or actual outbreaks of diseases, extreme or severe weather and natural disasters, actions of competitors (including, without limitation, pricing, scheduling, capacity, and network decisions, and consolidation and alliance activities), governmental actions, consumer perception, consumer uncertainties with respect to trade policies, tariffs, or government shutdowns, economic conditions, fears or actual acts of terrorism or war, sociodemographic trends, and other factors beyond the Company's control, on consumer behavior and the Company's results of operations and business decisions, plans, strategies, and results; (ii) the Company's ability to timely and effectively implement, transition, operate, maintain, and protect the technology systems, cybersecurity measures, artificial intelligence and other emerging technology capabilities, and infrastructure necessary to support its operations and initiatives; (iii) the Company's ability to effectively execute and evolve its strategic plans, initiatives, product offerings, and policies, including related consumer behavior and response; (iv) the impact of fuel price changes, fuel price volatility, and fuel availability on the Company's business plans and results of operations; (v) the impact of the Federal Aviation Administration and other governmental regulations and actions, including with respect to government shutdowns and Air Traffic Control staffing shortages and inefficiencies, as well as the Company's ability to obtain any required governmental approvals, on the Company's business plans, results, and operations; (vi) the Company's dependence on The Boeing Company ("Boeing") and Boeing suppliers with respect to the Company's aircraft deliveries, fleet and capacity plans, operations, maintenance, strategies, and goals; (vii) the Company's dependence on other third parties, including with respect to technology, revenue management, distribution channels, operational reliability, fuel supply, maintenance, and the impact on the Company's operations and results of operations of any third-party delays or nonperformance; (viii) the impact of labor matters on the Company's business decisions, plans, strategies, and results; (ix) the Company's ability to obtain and maintain adequate infrastructure and equipment to support its operations and initiatives; (x) the Company's dependence on its workforce, including its ability to employ and retain sufficient numbers of qualified Employees with appropriate skills and expertise to effectively and efficiently maintain its operations and execute the Company's plans; (xi) the cost and effects of the actions of activist shareholders; and (xii) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Southwest Airlines Co.

Condensed Consolidated Statement of Income

(in millions, except per share amounts)

(unaudited)

Three months ended

Nine months ended

September 30,

September 30,

2026

2025

Percent
Change

2026

2025

Percent
Change

OPERATING REVENUES:

Passenger

$    7,754

$    6,313

22.8

$  22,091

$  18,751

17.8

Freight

48

42

14.3

141

127

11.0

Other

621

594

4.5

1,872

1,743

7.4

     Total operating revenues

8,422

6,949

21.2

24,104

20,621

16.9

OPERATING EXPENSES:

Salaries, wages, and benefits

3,542

3,219

10.0

10,338

9,583

7.9

Aircraft fuel and related taxes

2,152

1,331

61.7

5,723

3,907

46.5

Maintenance materials and repairs

303

299

1.3

855

921

(7.2)

Landing fees and airport rentals

623

548

13.7

1,831

1,638

11.8

Depreciation and amortization

398

394

1.0

1,198

1,189

0.8

Other operating expenses

1,026

1,123

(8.6)

3,166

3,346

(5.4)

     Total operating expenses

8,043

6,914

16.3

23,110

20,584

12.3

OPERATING INCOME

379

35

n.m.

994

37

n.m.

NON-OPERATING EXPENSES (INCOME):

Interest expense

70

35

100.0

188

120

56.7

Capitalized interest

(13)

(13)

—

(38)

(38)

—

Interest income

(33)

(34)

(2.9)

(90)

(172)

(47.7)

Other gains, net

(1)

(21)

(95.2)

(13)

(28)

(53.6)

     Total non-operating expenses (income)

24

(33)

n.m.

47

(118)

n.m.

INCOME BEFORE INCOME TAXES

355

68

n.m.

946

155

n.m.

PROVISION FOR INCOME TAXES

85

14

n.m.

216

37

n.m.

NET INCOME

$       270

$         54

n.m.

$      730

$      118

n.m.

NET INCOME PER SHARE:

Basic

$      0.55

$      0.10

n.m.

$     1.48

$     0.21

n.m.

Diluted

$      0.55

$      0.10

n.m.

$     1.47

$     0.21

n.m.

WEIGHTED AVERAGE SHARES OUTSTANDING:               

Basic

489

523

(6.5)

492

548

(10.2)

Diluted

494

526

(6.1)

497

551

(9.8)

Southwest Airlines Co.

Reconciliation of Reported Amounts to Non-GAAP Financial Measures (excluding special items)

(See Note Regarding Use of Non-GAAP Financial Measures)

(in millions, except per share and per ASM amounts) (unaudited)

Three months ended

Nine months ended

September 30,

Percent

September 30,

Percent

2026

2025

Change

2026

2025

Change

Operating revenues, as reported

$    8,422

$    6,949

$  24,104

$  20,621

(a)

Add: Breakage revenue adjustment

—

—

285

—

Operating revenues, excluding special items

$    8,422

$    6,949

21.2

$  24,389

$  20,621

18.3

Aircraft fuel and related taxes, unhedged

$    2,123

$    1,295

$    5,637

$    3,797

(b)

Add: Premium cost of fuel contracts designated as hedges

29

36

86

110

Aircraft fuel and related taxes, as reported

$    2,152

$    1,331

61.7

$    5,723

$    3,907

46.5

Total operating expenses, as reported

$    8,043

$    6,914

$  23,110

$  20,584

Deduct: Impairment of long-lived assets

(30)

—

(30)

(8)

Deduct: Litigation accruals

(13)

—

(13)

(19)

Deduct: Transformation costs

—

(7)

—

(33)

(c)

Deduct: Severance and related costs

(30)

—

(45)

(62)

Total operating expenses, excluding special items

$    7,970

$    6,907

15.4

$  23,022

$  20,462

12.5

Deduct: Aircraft fuel and related taxes expense, as reported

(2,152)

(1,331)

(5,723)

(3,907)

Operating expenses, excluding Aircraft fuel and related
taxes expense and special items

$    5,818

$    5,576

4.3

$  17,299

$  16,555

4.5

Deduct: Profit-sharing expense

(62)

(11)

(165)

(26)

Operating expenses, excluding Aircraft fuel and related
taxes expense, special items, and profit sharing

$    5,756

$    5,565

3.4

$  17,134

$  16,529

3.7

Operating income, as reported

$       379

$         35

$       994

$         37

(a)

Add: Breakage revenue adjustment

—

—

285

—

Add: Impairment of long-lived assets

30

—

30

8

Add: Litigation accruals

13

—

13

19

Add: Transformation costs

—

7

—

33

(c)

Add: Severance and related costs

30

—

45

62

Operating income, excluding special items

$       452

$         42

976.2

$     1,367

$       159

759.7

Total operating revenues, as reported

$    8,422

$    6,949

$   24,104

$  20,621

Operating margin, as reported

4.5 %

0.5 %

4.0 pts.

4.1 %

0.2 %

3.9 pts.

Add: Impact of special items

0.9 %

0.1 %

1.5 %

0.6 %

Operating margin, excluding special items

5.4 %

0.6 %

4.8 pts.

5.6 %

0.8 %

4.8 pts.

Income before income taxes, as reported

$      355

$        68

$       946

$       155

(a)

Add: Breakage revenue adjustment

—

—

285

—

Add: Litigation accruals

13

—

13

19

Add: Transformation costs

—

7

—

33

(c)

Add: Severance and related costs

30

—

45

62

Add: Impairment of long-lived assets

30

—

30

8

Income before income taxes, excluding special items

$      428

$        75

470.7

$    1,320

$       277

376.5

Provision for income taxes, as reported

$        85

$        14

$       216

$         37

(d)

Add: Net income tax impact of special items

16

3

85

29

Provision for income taxes, net, excluding special items

$      101

$        17

494.1

$       301

$         66

356.1

Net income, as reported

$      270

$        54

$       730

$       118

(a)

Add: Breakage revenue adjustment

—

—

285

—

Add: Litigation accruals

13

—

13

19

Add: Transformation costs

—

7

—

33

(c)

Add: Severance and related costs

30

—

45

62

Add: Impairment of long-lived assets

30

—

30

8

(d)

Deduct: Net income tax impact of special items

(16)

(3)

(85)

(29)

Net income, excluding special items

$       328

$         58

465.5

$    1,019

$       211

382.9

Total operating revenues, as reported

$    8,422

$    6,949

$  24,104

$  20,621

Net margin, as reported

3.2 %

0.8 %

2.4 pts.

3.0 %

0.6 %

2.4 pts.

Add: Impact of special items

0.9 %

0.1 %

1.5 %

0.6 %

(d)

Deduct: Net income tax impact of special items

(0.2) %

— %

(0.3) %

(0.1) %

Net margin, excluding special items

3.9 %

0.8 %

3.1 pts.

4.2 %

1.0 %

3.2 pts.

Net income per share, diluted, as reported

$      0.55

$      0.10

$      1.47

$      0.21

Add: Impact of special items

0.15

0.02

0.75

0.22

(d)

Deduct: Net income tax impact of special items

(0.04)

(0.01)

(0.17)

(0.05)

Net income per share, diluted, excluding special items

$      0.66

$      0.11

500.0

$      2.05

$      0.38

439.5

Operating revenues per ASM (cents), as reported

      18.55 ¢

      15.25 ¢

     17.92 ¢

     15.39 ¢

Add: Impact of special items

—

—

0.21

—

Operating revenues per ASM, excluding special items (cents)

      18.55 ¢

      15.25 ¢

21.6

     18.13 ¢

     15.39 ¢

17.8

Operating expenses per ASM (cents)

      17.72 ¢

      15.17 ¢

     17.18 ¢

     15.36 ¢

Deduct: Impact of special items

(0.16)

(0.02)

(0.07)

(0.09)

Deduct: Aircraft fuel and related taxes expense divided by ASMs

(4.74)

(2.92)

(4.25)

(2.91)

Deduct: Profit-sharing expense divided by ASMs

(0.14)

(0.02)

(0.12)

(0.02)

Operating expenses per ASM, excluding Aircraft fuel and related                
taxes expense, special items, and profit sharing (cents)

      12.68 ¢

      12.21 ¢

3.8

     12.74 ¢

     12.34 ¢

3.2

(a) Represents a change in breakage revenue estimate related to non-expiring flight credits the Company issued to Passengers between July 2022 and December 2025. Due to higher-than-projected Customer redemptions of these non-expiring flight credits, along with updated projections of future redemptions, the Company has revised its estimates with regards to the remaining non-expiring flight credits that remain available for redemption.

(b) Includes amounts reclassified from Accumulated other comprehensive income associated with hedges previously terminated.

(c) Represents Employee severance and other related payments resulting from corporate workforce reductions.

(d) Tax amounts for each individual special item are calculated at the Company's effective rate for the applicable period and totaled in this line item.

Southwest Airlines Co.

Comparative Consolidated Operating Statistics

(unaudited)

Relevant comparative operating statistics for the three and nine months ended September 30, 2026 and 2025 are included below. The Company provides these operating
statistics because they are commonly used in the airline industry and, as such, allow readers to compare the Company's performance against its results for the prior year
period, as well as against the performance of the Company's peers. 

Three months ended

Nine months ended

September 30,

Percent

September 30,

Percent

2026

2025

Change

2026

2025

Change

Revenue passengers carried (000s)

33,467

34,581

(3.2)

96,973

100,078

(3.1)

Enplaned passengers (000s)

43,310

43,806

(1.1)

125,105

125,330

(0.2)

Revenue passenger miles (RPMs) (in millions) (a)

36,214

36,362

(0.4)

104,711

103,875

0.8

Available seat miles (ASMs) (in millions) (b)

45,393

45,567

(0.4)

134,535

133,994

0.4

Load factor (c)

79.8 %

79.8 %

— pts.

77.8 %

77.5 %

0.3 pts.

Average length of passenger haul (miles)

1,082

1,051

2.9

1,080

1,038

4.0

Average aircraft stage length (miles)

776

784

(1.0)

779

781

(0.3)

Trips flown

357,374

356,952

0.1

1,055,484

1,056,790

(0.1)

Seats flown (000s) (d)

57,593

57,643

(0.1)

169,631

170,145

(0.3)

Seats per trip (e)

161.2

161.5

(0.2)

160.7

161.0

(0.2)

Average passenger fare

$   231.69

$   182.56

26.9

$    227.81

$    187.36

21.6

Passenger revenue yield per RPM (cents) (f)

21.41

17.36

23.3

21.10

18.05

16.9

RASM (cents) (g)

18.55

15.25

21.6

17.92

15.39

16.4

RASM, excluding special items (cents)

18.55

15.25

21.6

18.13

15.39

17.8

PRASM (cents) (h)

17.08

13.85

23.3

16.42

13.99

17.4

CASM (cents) (i)

17.72

15.17

16.8

17.18

15.36

11.8

CASM, excluding fuel (cents)

12.98

12.25

6.0

12.92

12.45

3.8

CASM, excluding special items (cents)

17.56

15.16

15.8

17.11

15.27

12.0

CASM, excluding fuel and special items (cents)

12.82

12.24

4.7

12.86

12.36

4.0

CASM, excluding fuel, special items, and profit sharing (cents)          

12.68

12.21

3.8

12.74

12.34

3.2

Fuel costs per gallon, including fuel tax (unhedged)

$     3.87

$      2.33

66.1

$       3.50

$       2.33

50.2

Fuel costs per gallon, including fuel tax

$     3.92

$      2.40

63.3

$       3.56

$       2.40

48.3

Fuel consumed, in gallons (millions)

548

554

(1.1)

1,607

1,624

(1.0)

Active fulltime equivalent Employees

73,092

72,223

1.2

73,092

72,223

1.2

Aircraft at end of period

803

802

0.1

803

802

0.1

(a) A revenue passenger mile is one paying passenger flown one mile. Also referred to as "traffic," which is a measure of demand for a given period.

(b) An available seat mile is one seat (empty or full) flown one mile. Also referred to as "capacity," which is a measure of supply or the space available to carry passengers in a given period.

(c) Revenue passenger miles divided by available seat miles.

(d) Seats flown is calculated using total number of seats available by aircraft type multiplied by the total trips flown by the same aircraft type during a particular period.

(e) Seats per trip is calculated by dividing seats flown by trips flown.

(f) Calculated as passenger revenue divided by revenue passenger miles. Also referred to as "yield," this is the average cost paid by a paying passenger to fly one mile, which is a measure of revenue production and fares.

(g) RASM (unit revenue) - Operating revenue yield per ASM, calculated as operating revenue divided by available seat miles. Also referred to as "operating unit revenues," this is a measure of operating revenue production based on the total available seat miles flown during a particular period.

(h) PRASM (Passenger unit revenue) - Passenger revenue yield per ASM, calculated as passenger revenue divided by available seat miles. Also referred to as "passenger unit revenues," this is a measure of passenger revenue production based on the total available seat miles flown during a particular period.

(i) CASM (unit costs) - Operating expenses per ASM, calculated as operating expenses divided by available seat miles. Also referred to as "unit costs" or "cost per available seat mile," this is the average cost to fly an aircraft seat (empty or full) one mile, which is a measure of cost efficiency.

Southwest Airlines Co.

Condensed Consolidated Balance Sheet

(in millions)

(unaudited)

September 30, 2026

December 31, 2025

ASSETS

Current assets:

     Cash and cash equivalents

$                  3,624

$                  3,231

     Accounts and other receivables

1,313

1,149

     Inventories of parts and supplies, at cost

997

775

     Prepaid expenses and other current assets

572

490

          Total current assets

6,506

5,645

Property and equipment, at cost:

     Flight equipment

26,144

26,293

     Ground property and equipment

9,686

9,163

     Deposits on flight equipment purchase contracts

723

401

     Assets constructed for others

88

88

36,642

35,945

     Less allowance for depreciation and amortization

15,654

15,700

20,988

20,245

Goodwill

970

970

Operating lease right-of-use assets

994

1,089

Other assets

1,081

1,112

$                30,539

$                 29,061

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

     Accounts payable

$                  1,847

$                  1,991

     Accrued liabilities

2,382

2,349

     Current operating lease liabilities

278

312

     Air traffic liability

7,078

5,945

     Current maturities of long-term debt

2,153

324

          Total current liabilities

13,738

10,921

Long-term debt less current maturities

3,734

4,577

Air traffic liability - noncurrent

1,199

1,219

Deferred income taxes

2,513

2,289

Noncurrent operating lease liabilities

706

768

Other noncurrent liabilities

1,320

1,306

Stockholders' equity:

     Common stock

888

888

     Capital in excess of par value

4,326

4,322

     Retained earnings

16,853

16,388

     Accumulated other comprehensive income (loss)                    

51

(24)

     Treasury stock, at cost

(14,790)

(13,593)

          Total stockholders' equity

7,329

7,981

$                30,539

$                 29,061

Southwest Airlines Co.

Condensed Consolidated Statement of Cash Flows

(in millions) (unaudited)

Three months ended
September 30,

Nine months ended
September 30,

2026

2025

2026

2025

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$       270

$        54

$       730

$       118

Adjustments to reconcile net income to net cash provided by
operating activities:

Depreciation and amortization

398

394

1,198

1,189

Impairment of long-lived assets

30

—

30

8

Deferred income taxes

83

14

201

37

Gain on sale of property and equipment

(96)

(13)

(272)

(28)

Gain on sale-leaseback transactions

(118)

—

(118)

(3)

Changes in certain assets and liabilities:

Accounts and other receivables

(95)

(83)

(151)

64

Other assets

(41)

3

(156)

359

Accounts payable and accrued liabilities

41

11

(14)

(209)

Air traffic liability

92

(172)

1,113

(117)

Other liabilities

(86)

16

(216)

(19)

Cash collateral provided to derivative counterparties

—

—

—

(22)

Other, net

33

63

115

170

Net cash provided by operating activities

513

287

2,460

1,547

CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures

(1,006)

(735)

(2,454)

(1,922)

Proceeds from sale of property and equipment

285

57

735

108

Proceeds from sale-leaseback transactions

212

—

212

23

Purchases of short-term investments

—

(100)

—

(470)

Proceeds from sales of short-term and other investments

—

350

—

1,577

Other, net

—

—

(6)

(3)

Net cash used in investing activities

(509)

(428)

(1,513)

(687)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of long-term debt

—

—

1,500

—

Proceeds from Employee stock plans

14

14

46

46

Repurchase of common stock

—

(250)

(1,250)

(2,500)

Payments of long-term debt and finance lease obligations

(5)

(6)

(442)

(2,603)

Payments of cash dividends

(176)

(189)

(357)

(399)

Other, net

(4)

(1)

(51)

(11)

Net cash used in financing activities

(171)

(432)

(554)

(5,467)

NET CHANGE IN CASH AND CASH EQUIVALENTS

(167)

(573)

393

(4,607)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD               

3,791

3,475

3,231

7,509

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$     3,624

$     2,902

$     3,624

$     2,902

NOTE REGARDING USE OF NON-GAAP FINANCIAL MEASURES
The Company's unaudited Condensed Consolidated Financial Statements are prepared in accordance with GAAP. These GAAP financial statements include (i) unrealized noncash reclassifications, as a result of accounting requirements and elections previously made under accounting pronouncements relating to derivative instruments and hedging and (ii) other charges and benefits the Company considers unusual and/or infrequent in nature and thus may make comparisons to its prior or future performance difficult.

Accordingly, the Company also provides financial information in this filing that was not prepared in accordance with GAAP and should not be considered as a substitute for the information prepared in accordance with GAAP. The Company provides supplemental non-GAAP financial information (also referred to as "excluding special items"). Management believes special items can distort the trends associated with the Company's ongoing performance. Therefore, management utilizes non-GAAP financial measures to evaluate the Company's financial performance, anticipate future operating results, and assess trends without the impact of items that can vary significantly from period to period. The following measures are often provided, excluding special items, and are utilized by the Company's management, analysts, and investors to enhance comparability of year-over-year results, as well as to industry trends: Operating revenues, non-GAAP; Total operating expenses, non-GAAP; Operating expenses, non-GAAP excluding Aircraft fuel and related taxes expense; Operating expenses, non-GAAP excluding Aircraft fuel and related taxes expense and profit sharing; Operating income, non-GAAP; Adjusted Operating income, non-GAAP; Income before income taxes, non-GAAP; Provision for income taxes, net, non-GAAP; Net income, non-GAAP; Net income per share, diluted, non-GAAP; Operating revenues per ASM, non-GAAP (cents); Operating expenses per ASM, non-GAAP, excluding Aircraft fuel and related taxes expense and profit sharing (cents); Return on invested capital, non-GAAP; adjusted operating margin; adjusted net margin; and gross leverage.

For the periods presented, special items include:

Charges associated with tentative and/or actual litigation settlements; Expenses associated with professional advisory fees related to the Company's implementation of its comprehensive transformational plan; Charges associated with Employee severance and other related payments resulting from corporate workforce reductions; Reversal of breakage revenue recorded in prior years related to a portion of non-expiring flight credits issued to Customers that have either been redeemed or are expected to be redeemed in future periods; Non-cash impairment charges to remove certain assets no longer in use that are not related to the direct operations of the Company from the unaudited Condensed Consolidated Balance Sheet; Expenses associated with incremental professional advisory fees related to activist investor activities, which were not budgeted by the Company or associated with the ongoing operation of the airline; Incremental expense associated with a voluntary separation program that allowed eligible Employees the opportunity to voluntarily separate from the Company in exchange for severance, medical/dental coverage for a specified period of time, and travel privileges based on years of service; and A credit received from the Department of Transportation ("DOT") regarding a settlement reached for the  Company's December 2022 operational disruption in light of the Company significantly improving its on-time performance and completion factor through the Company's investment in its Network Operations Control. The Company has also provided its calculation of return on invested capital, which is a measure of financial performance used by management to evaluate its investment returns on capital. Return on invested capital is not a substitute for financial results as reported in accordance with GAAP and should not be utilized in place of such GAAP results. Return on invested capital is not a measure defined by GAAP. It is calculated by the Company, in part, using non-GAAP financial measures, which include charges or benefits that are deemed "special items." As noted above, the Company believes "special items" make it difficult to compare to prior periods, anticipated future periods, or industry trends since these items cannot be reliably predicted or estimated. The Company believes non-GAAP return on invested capital is a meaningful measure because it quantifies the Company's effectiveness in generating returns relative to the capital it has invested in its business. Although return on invested capital is commonly used as a measure of capital efficiency, definitions of return on invested capital differ; therefore, the Company is providing an explanation of its calculation for non-GAAP return on invested capital in the accompanying reconciliation in order to allow investors to compare and contrast its calculation to the calculations provided by other companies.

Southwest Airlines Co.

Non-GAAP Return on Invested Capital (ROIC)

(in millions)

(unaudited)

Twelve months ended

Twelve months ended

September 30, 2026

September 30, 2025

Operating income, as reported

$                   1,384

$                     315

Breakage revenue adjustment

285

116

Severance and related costs

45

62

Voluntary Employee programs

—

5

Net impact from fuel contracts

—

(25)

Professional advisory fees

—

18

Transformation costs

—

37

DOT settlement

(11)

—

Litigation accruals

13

19

Impairments

30

8

Operating income, non-GAAP

$                   1,747

$                     555

Net adjustment for aircraft leases (a)

214

201

Adjusted operating income, non-GAAP (A)

$                   1,961

$                     756

Non-GAAP tax rate (B)

22.7 %

(d)

22.4 %

(e)

Net operating profit after-tax, NOPAT (A* (1-B) = C)

$                   1,516

$                     587

Debt, including finance leases (b)

$                   5,244

$                  5,921

Equity (b)

7,409

9,181

Net present value of aircraft operating leases (b)

814

977

Average invested capital

$                 13,467

$                16,079

Equity adjustment for hedge accounting (c)

(8)

32

Adjusted average invested capital (D)

$                 13,459

$                16,111

Non-GAAP ROIC, pre-tax (A/D)

14.6 %

4.7 %

Non-GAAP ROIC, after-tax (C/D)

11.3 %

3.6 %

(a) Net adjustment to reflect all aircraft in fleet as owned (i.e., the impact of eliminating aircraft rent expense and replacing with estimated depreciation expense for those same aircraft). The Company makes this adjustment to enhance comparability to other entities that have different capital structures by utilizing alternative financing decisions.

(b) Calculated as an average of the five most recent quarter end balances or remaining obligations. The Net present value of aircraft operating leases represents the assumption that all aircraft in the Company's fleet are owned, as it reflects the remaining contractual commitments discounted at the Company's estimated incremental borrowing rate as of the time each individual lease was signed.

(c) The Equity adjustment in the denominator adjusts for the cumulative impacts, in Accumulated other comprehensive income and Retained earnings, of gains and/or losses that will settle in future periods, including those associated with the Company's terminated fuel hedges. The prior period impact of these gains and/or losses is reflected in the Net impact from fuel contracts in the numerator.
(d) The GAAP twelve month rolling tax rate as of September 30, 2026, was 22.2 percent, and the Non-GAAP twelve month rolling tax rate was 22.7 percent. See Note Regarding Use of Non-GAAP Financial Measures for additional information.

(e) The GAAP twelve month rolling tax rate as of September 30, 2025, was 21.8 percent, and the Non-GAAP twelve month rolling tax rate was 22.4 percent. See Note Regarding Use of Non-GAAP Financial Measures for additional information.

The Company has also provided gross leverage, which is calculated as adjusted debt divided by trailing twelve month adjusted EBITDAR. Leverage, adjusted debt, and adjusted EBITDAR are non-GAAP measures of financial performance. Management believes these supplemental measures can provide a more accurate view of the Company's leverage and risk, since they consider the Company's debt and debt-like obligation profile. Leverage ratios are widely used by investors, analysts, and rating agencies in the valuation, comparison, rating, and investment recommendations of companies. Although adjusted debt, adjusted EBITDAR, and leverage ratios are commonly-used financial measures, definitions of each differ; therefore, the Company is providing an explanation of its calculations for non-GAAP adjusted debt and adjusted EBITDAR in the accompanying reconciliation below in order to allow investors to compare and contrast its calculations to the calculations provided by other companies.

Southwest Airlines Co.

Non-GAAP Gross Leverage

(in millions) (unaudited)

September 30, 2026

Current maturities of long-term debt, as reported

$                        2,153

Long-term debt less current maturities, as reported

3,734

Total debt, including finance leases (A)

5,887

Add: Current operating lease liabilities, as reported

278

Add: Noncurrent operating lease liabilities, as reported

706

Adjusted debt (B)

$                        6,871

Twelve Months Ended

September 30, 2026

Net income, as reported (C)

$                        1,053

Interest expense (income), net of capitalized interest, as reported

59

Income tax expense (benefit), as reported

300

Non-operating other (gains) losses, net, as reported

(28)

Operating income, as reported

1,384

Impact of special items

363

Operating income, non-GAAP

1,747

Depreciation and amortization

1,569

Fixed portion of operating lease expense

345

Adjusted EBITDAR (D)

$                        3,661

Total debt to Net income (A/C)

5.6x

Adjusted debt to adjusted EBITDAR (B/D)

1.9x

SOURCE Southwest Airlines Co.

Southwest Airlines became the third major U.S. airline this month to cut its 2026 profit forecast due to higher fuel prices, but CEO Bob Jordan said travelers continue to book despite higher fares.

The carrier expects to earn between $2.60 and $2.85 a share on an adjusted basis this year, down from its forecast in July of between $3.25 to as much as $4.25 a share.

Here's what Southwest reported for third quarter compared with Wall Street expectations, according to consensus estimates from LSEG:

Earnings per share: 66 cents adjusted vs. 58 cents expectedRevenue: $8.42 billion adjusted vs. $8.25 billion expectedSouthwest forecast per-share adjusted earnings of between 55 cents and 80 cents in the fourth quarter and unit revenue, a gauge of airfare, up as much as 21% from a year earlier. It said it expects to grow capacity by up to 4% year over year.

"Demand remained strong as we lapped last year's bag fee and other commercial initiatives, reinforcing our belief that the earnings power we've built is durable, even with significantly higher fuel costs," Jordan said in an earnings release.

The airline said its average passenger fare was $231.69 in the third quarter, up almost 27% from the same quarter of 2025. A spokesman said that number does not include add-on fees. The number of revenue passengers carried fell 3.2% to 33.47 million people.

Under pressure to grow revenue, Southwest has been remaking its longtime business model over the past several years, scrapping its old policies like two free checked bags per passenger and open seating. In its place, Southwest has started charging for many seat assignments and added a bag fee, similar to major competitors.

For the third quarter, Southwest posted net income of $270 million, or 55 cents a share, up from $54 million or 10 cents a share a year earlier. Revenue rose more than 21% to $8.42 billion.

Adjusting for one-time items, Southwest reported 66 cents a share.

Delta Air Lines and United Airlines also cut their profit outlooks for the rest of the year when they reported third-quarter earnings. Both of those airlines reported top- and bottom-line misses for the third quarter.

Read more CNBC airline newsWhy airfare could rise even more, but airline profits won’tBudget airline king Bill Franke warms to premium upgradesCompanies spurn airlines’ cheapest business class ticketsUnited’s next decision: What to do with all those Boeing 737 Max 10 seats it ordered years agoRecord heat, crowds drive offseason boom in international travel

Shares of airline company Southwest Airlines (NYSE:LUV) are trading higher after reporting record third-quarter results Wednesday after market close.

A bigger paycheck sounds like the obvious choice, but one retiree's math reveals how a benefit that never appears on a pay stub can quietly outperform thousands of dollars in extra wages.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

A 65-year-old retiree has two part-time job offers. The first pays $21 an hour, while the other is a ticket counter job at Southwest Airlines (NYSE:LUV | LUV Price Prediction) that pays about $17 to $19 an hour and includes free standby flights. She has $400,000 saved, collects $2,600 a month from Social Security, is on Medicare, and spends about $9,000 a year flying to see her kids in Seattle and Austin.

In her real budget, the $21 job loses by thousands of dollars a year. Retirees often make this trade. The New York Times profiled retirees who took part-time travel-industry jobs for the perks, including a couple whose flights cost $462 total because they paid only the taxes.

Why Flights Beat a Bigger Paycheck
Her benefit already sits above the $2,071 average for retired workers in 2026, so she works to fund extras, and airfare is her biggest one. The deciding factor is which job leaves more money in her pocket after she pays for the travel she plans to take regardless.

Southwest gives employees free, unlimited travel privileges for themselves and eligible dependents. The tax code treats this kind of perk as a “no-additional-cost service”: something the employer already sells to customers and can provide to staff at little added cost. That’s why it never shows up on a pay stub, and why it’s worth more than its sticker price.

Running the Pre-Tax Math
Every dollar she stops spending on flights is an after-tax dollar. Say she’s in the 12% federal bracket and also pays the 7.65% employee payroll tax. To keep $9,000, she’d have to earn about $11,200 in wages. Twenty hours a week at Southwest comes to about $18,000 a year. The flight perk is worth roughly 60% of that paycheck.

Comparison
Amount

Extra gross pay from $4 more per hour, 20 hours a week
$4,160

That extra pay after income and payroll tax
About $3,340

Flight spending Southwest replaces
About $9,000

Net annual edge for Southwest
About $5,700

Earnings Test Room at Both Jobs
Because she took Social Security at 65, before full retirement age, the earnings test applies. In 2026, wages above $24,480 trigger withholding of $1 of every $2 over the limit. At about $18,000, Southwest keeps her well under. The $21 job at the same hours pays $21,840, so a handful of extra holiday shifts could push her over the line.

Health insurance also drops out of the comparison, as she already pays the standard $202.90 monthly Part B premium, so employer coverage adds little. For a reader under 65, part-time health benefits can outweigh both the pay gap and the flights, so check that first.

Where Standby Travel Falls Short
One potential issue is that standby travel doesn’t guarantee a seat. Thanksgiving and Christmas flights fill up, and she may get bumped repeatedly. International trips on partner airlines carry taxes and fees. Her adult kids won’t qualify either because eligible children must be under 19 (or up to age 24 if they’re full-time students). When they come to visit her, they pay full fare, which may or may not be a big deal.

Southwest offers a partial fix: an unlimited 20% discount on all Southwest flights employees and eligible travelers purchase. Buying confirmed holiday seats at a discount still costs less than paying full fare on every trip. Keep in mind that the perk disappears when the job does, unless she reaches the service years required for retiree privileges.

Two Moves That Settle This Decision

Price your actual travel before comparing wages. The break-even is about $3,340 of after-tax flight spending a year. If you fly to family less than that, take the $21 job. If you fly more, the airline job wins, and the gap grows with every trip.
Plan your hours around the earnings test until full retirement age. Keep wages under $24,480 unless you decide the extra pay is worth having benefits withheld for now. To earn the fee, a fee-only planner models two things: whether to keep working past full retirement age (when the test goes away) and how extra wages push more of your Social Security into taxable income.

Contact [email protected] for any questions or corrections.

New loyalty program benefits, expanded redemption options, premium experiences, and fleetwide Starlink connectivity bring more value to Rapid Rewards

, /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) announced today the next evolution of its award-winning Rapid Rewards® program, making the loyalty program more rewarding for Customers throughout the travel journey.

Starting January 1, 2027, Southwest Airlines will introduce a new three-tier loyalty structure: Silver, Gold, and Platinum.

Southwest Airlines shares the first rendering of the Southwest Icon Lounge™ at Nashville International Airport, expected to open in late 2027.

A timeline of the new Southwest Airlines Rapid Rewards Milestone Rewards. Beginning January 1, 2027, Members will see a new lineup of Silver, Gold, and Platinum tiers, new Milestone Rewards to earn along the way to status, more opportunities for Companion Pass® trips, and a faster path to tier status for Rapid Rewards Credit Cardmembers. Additional enhancements will give Members new ways to earn and redeem points through international loyalty partners and to enjoy using points for seat selection and rental cars.

"Rapid Rewards was built on a simple idea: make it easy for Customers to earn and use rewards," said Nandika Suri, Vice President of Rapid Rewards at Southwest Airlines. "As our Members engage more with Southwest, they've told us they want Rapid Rewards to reward them in more meaningful ways, whether they're working toward status or using the points they've earned. These updates build on that feedback by rewarding Members throughout their Southwest experience, while keeping the simplicity and value that have always set our program apart."

More Rewards Along the Way
Rapid Rewards will continue to offer the hallmark benefits that Members value, including no blackout dates, points that don't expire, and flexible options to earn tier status through both Tier Qualifying Points (TQPs) and qualifying flights. The airline is introducing new enhancements to build on that foundation, including:

New Platinum status, with Unlimited Companion Pass
Southwest® is introducing a new three-tier structure to give Members more opportunities that unlock valuable benefits as their engagement grows.Beginning in January 2027, A-List will become Silver and A-List Preferred will become Gold. In addition, Southwest is introducing a new tier to its program—Platinum. Platinum status will sit above Silver and Gold and will include unlimited Companion Pass trips1.

New Milestone Rewards; Reach First Reward Before Reaching Silver Status
Starting in January 2027, Members will no longer have to wait until reaching a new tier to receive rewards. Southwest is adding Milestone Rewards along a Member's tier journey2. Before Members reach Silver, they'll be able to select rewards like Rapid Rewards points or seat certificates. Between Gold and Platinum, Members can qualify to receive three Companion Pass trips. A Faster Path to Tier Status
Beginning in January 2027, every Rapid Rewards Credit Cardmember, including Plus Cardmembers, will earn one TQP for every dollar spent on purchases with a Rapid Rewards® Credit Card from Chase3. This change gives every Cardmember a simpler, faster path to tier status. More Ways to Use Rapid Rewards Points

New International Redemptions
In Spring 2027, Members will be able to earn and redeem Rapid Rewards points for travel through new international airline loyalty partnerships, initially with Icelandair, China Airlines, and Etihad Airways. These partnerships will give Customers access to popular destinations from Reykjavik to Paris, Taipei to Tokyo, and Abu Dhabi to Johannesburg. Use Points for Seats and Rental Cars
Later in 2027, Rapid Rewards Members will also be able to use points for seat selection on Southwest-operated flights, including Extra Legroom and Preferred seats4. Beginning in November 2026, Members can redeem Rapid Rewards points for rental cars across all participating car rental partners directly through cars.southwest.com. A More Rewarding Travel Experience
In addition to new program rewards, Southwest is introducing new travel experiences:

Southwest Icon Lounge™ - A New Way to Experience Southwest Hospitality
The airline is bringing its Hospitality to a new part of the journey in late 2027 with the Southwest Icon Lounge™ network, in partnership with Chase. The lounges will combine premium amenities, thoughtful and local design, and the warmth of Southwest's culture to create distinctive spaces where Customers can relax, get work done, or simply enjoy the lounge before they travel.The Southwest Icon name celebrates Southwest's 55-year legacy—from Herb Kelleher's people-first philosophy to the Customers and Employees who continue to shape its story.

Access to the Southwest Icon Lounge network will be available through a new, premium, Southwest Rapid Rewards® Credit Card, issued by Chase, launching in 2027.

Fleetwide Starlink Connectivity in 2027
Southwest is bringing the fastest WiFi in the sky, powered by Starlink, to its entire fleet. In fall 2027, Southwest expects to become the first major U.S. airline to complete a fleetwide rollout of Starlink, providing access to high-speed connectivity from takeoff to landing.WiFi is available free to Rapid Rewards Members, thanks to T-Mobile®5.

Additional details on tiers, Companion Pass, Rapid Rewards points redemption, international loyalty partnerships, and more can be found at southwest.com/rapid-rewards/2027/.

ABOUT SOUTHWEST AIRLINES CO.
Southwest Airlines Co. operates one of the world's most admired and awarded airlines, offering its one-of-a-kind value and Hospitality at 121 airports across 12 countries. Southwest took flight in 1971 to democratize the sky through friendly, reliable, and low-cost air travel and now carries more air travelers flying nonstop within the United States than any other airline.6 By empowering its more than 73,0007  People to deliver unparalleled Hospitality, the maverick airline cherishes a passionate loyalty among more than 134 million Customers carried in 2025. Southwest leverages a unique legacy and mission to serve communities around the world including harnessing the power of its People and Purpose to put communities at the Heart of its success. Learn more by visiting Southwest.com/citizenship.

1 Companion Pass benefits allow a Member to designate one Companion to fly with the Member on Southwest®-operated flights. A Companion's reservation must be booked through Southwest. Companion Pass travel has no blackout dates but is subject to availability. While there are no seat restrictions, a seat must be available on a flight for a Companion. For more information regarding Companion Pass benefits, please visit https://www.southwest.com/rapid-rewards/2027/companion-pass-changes/.
2 Eligible Rapid Rewards® Members who achieve a Milestone may select from available Milestone Rewards depending on the applicable Milestone level. Benefit selections are final. Benefits are subject to eligibility requirements, expiration dates, usage restrictions, and additional terms and conditions. Visit https://www.southwest.com/rapid-rewards/guides/milestone-rewards-explained/ for complete details.
3 Effective January 1, 2027, the earning of Tier Qualifying Points through credit card spend changes. Tier Qualifying Points are earned through flight purchases, the cash portion of a cash plus points reservation, points from spend on Southwest Rapid Rewards Credit Cards at one Tier Qualifying Point earned per $1 spent on eligible purchases on the card, Getaways by Southwest purchases, Tier Qualifying Point bonus promotions, and buy Tier Qualifying Points promotions.
4 Rapid Rewards® Members may redeem points for available eligible seat selections on Southwest Airlines-operated flights after booking and ticketing and prior to check-in. Available seat types and the number of points required vary by flight and are subject to change until the seat selection is completed. Points may not be used to purchase seat selections at the airport, including at kiosks or the gate. Rapid Rewards terms and conditions apply.
5 Where available. Available only on WiFi-enabled designated aircraft.
6 Based on U.S. Dept. of Transportation quarterly Airline Origin & Destination Survey as of Q4 2025.
7 Fulltime-equivalent active Employees as of June 30, 2026.

Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements related to (i) the Company's initiatives, strategic priorities, focus areas, core strengths, goals, and opportunities, including with respect to product offering enhancements; and (ii) the Company's expectations with respect to the timing of and Customer response to its product offering enhancements. These forward-looking statements are based on the Company's current estimates, intentions, beliefs, expectations, goals, strategies, and projections for the future and are not guarantees of future performance. Forward-looking statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) the impact of geopolitical conflicts, fears or actual outbreaks of diseases, extreme or severe weather and natural disasters, actions of competitors (including, without limitation, pricing, scheduling, capacity, and network decisions, and consolidation and alliance activities), governmental actions, consumer perception, consumer uncertainties with respect to trade policies, tariffs, or government shutdowns, economic conditions, fears or actual acts of terrorism or war, sociodemographic trends, and other factors beyond the Company's control, on consumer behavior and the Company's results of operations and business decisions, plans, strategies, and results; (ii) the Company's ability to timely and effectively implement, transition, operate, maintain, and protect the technology systems, cybersecurity measures, artificial intelligence and other emerging technology capabilities, and infrastructure necessary to support its operations and initiatives; (iii) the Company's ability to effectively execute and evolve its strategic plans, initiatives, product offerings, and policies, including related consumer behavior and response; (iv) the impact of fuel price changes, fuel price volatility, and fuel availability on the Company's business plans and results of operations; (v) the impact of the Federal Aviation Administration and other governmental regulations and actions, including with respect to government shutdowns and Air Traffic Control staffing shortages and inefficiencies, as well as the Company's ability to obtain any required governmental approvals, on the Company's business plans, results, and operations; (vi) the Company's dependence on The Boeing Company ("Boeing") and Boeing suppliers with respect to the Company's aircraft deliveries, fleet and capacity plans, operations, maintenance, strategies, and goals; (vii) the Company's dependence on other third parties, including with respect to technology, revenue management, distribution channels, operational reliability, fuel supply, maintenance, and the impact on the Company's operations and results of operations of any third-party delays or nonperformance; (viii) the impact of labor matters on the Company's business decisions, plans, strategies, and results; (ix) the Company's ability to obtain and maintain adequate infrastructure and equipment to support its operations and initiatives; (x) the Company's dependence on its workforce, including its ability to employ and retain sufficient numbers of qualified Employees with appropriate skills and expertise to effectively and efficiently maintain its operations and execute the Company's plans; (xi) the cost and effects of the actions of activist shareholders; and (xii) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

SOURCE Southwest Airlines Co.

Goodbye, A-List and A-List Preferred.

Southwest Airlines is scrapping its two-tier loyalty program starting next year and instead rolling out silver, gold and platinum levels that are similar to what other carriers offer, as the once-quirky airline seeks to increase revenue and reward its biggest spenders.

Southwest executives have been overhauling the airline, getting rid of longtime customer perks like two free checked bags and open seating. It's now charging for some of those options, like rivals have been doing for years.

Along with the shift from two to three loyalty levels, the carrier is also changing the names of its tiers. Under the old version, travelers could be classified into A-List or A-List Preferred, which was the higher level.

"If you think about A-List and A-List Preferred, we don't even have [boarding] groups A, B and C anymore," Tony Roach, Southwest chief customer and brand officer, said in an interview. "So it was time to do a refresh to somewhat incorporate all the changes to seating and all these new experiences that we've been adding."

Here's what's changing for the loyalty program:

A-List and A-List Preferred Rapid Rewards status levels will go away on Jan. 1.A-List customers will be shifted to Silver status in the Rapid Rewards program. A-List Preferred members will get Gold status.A new Platinum tier will be added for the airline's "most engaged" customers.Customers can earn 1 Tier Qualifying Point, or TQP, per $1 spent on Southwest co-branded credit cards with Chase. Here are the new status requirements:

Silver status will require 35,000 TQPs or 25 qualifying flights. Previously, A-List was 35,000 points or 20 flights. For Silver members, the points-earning bonus on flights will go up from 25% to 40%.To earn Gold, customers will have to reach 65,000 TQPs, down from 70,000 points for A-List Preferred, or take 50 flights. The points-earning bonus for those with that status goes from 100%, or double points earning, to 60% on qualifying flights. The new, top-tier Platinum status requires 140,000 TQPs or 100 qualifying flights. Platinum members will get a 120% earnings bonus on qualifying flights. Read more about Southwest's changesSouthwest to debut airport lounges in four cities, with more to comeSouthwest ends open seating after 54 years. Here's what the last flight was likeAirport lounges, Europe and premium class are on the table, Southwest CEO saysHow much are Southwest's new assigned seats? It dependsGoodbye to 'bags fly free' on Southwest Airlines, the last freebie in AmericaSilver status members will board in Group 1, while Gold members will board before Group 1. Platinum members will board before both Gold members and Group 1. Platinum tier also has unlimited Companion Pass trips.

Southwest's Companion Pass — which lets a designated person fly for free, minus taxes and fees, with a traveler who has that perk — is also changing.

Companion Pass holders that have them in their accounts will be able to hold onto them for the duration of their term. But starting with the 2027 earning year, Companion Pass benefits will be earned through TQPs or qualifying flights, by hitting a milestone reward or with Platinum status.

Currently, a Rapid Rewards member has to earn at least 135,000 qualifying points or 100 one-way flights to qualify for the pass.

The airline is also expanding its partnerships with international airlines and building its first airport lounges. Southwest on Thursday offered a peek into the new lounges, which it has named Icon, and is working on with its credit card partner, Chase. The carrier is building Icon lounges in four cities around the U.S., with others in the works.

Southwest is also adding benefits for customers that are in between status tiers, similar to what American Airlines offers.

For example, after earning 20,000 points or taking 15 qualifying flights, customers can choose between 2,000 more Rapid Rewards points or two coupons to select a "preferred" seat, which is a standard legroom seat that's closer to the front of the plane or a more popular aisle or window seat.

Customers will also get three Companion Pass trips after earning 95,000 points or taking 75 qualifying flights, which is below the Platinum threshold.

"That is definitely different from what we've done before," said Nandika Suri, who heads Southwest's Rapid Rewards loyalty program. She said the new strategy is "a way for us to actually recognize and reward customers ... faster and more frequently in their journey to continue to engage with us."

watch now

Airlines overall have consistently raised the requirements to earn status, requiring more spending, and have made similar changes to enter their airport lounges.

United Airlines on Tuesday said it would no longer allow customers to earn status in its Mileage Plus program based on flight segments next year and that it would only accept Premier qualifying points, which are earned from flight spending and on a co-branded credit card.

United also raised the requirements to reach Premier 1K, its highest frequent flyer tier outside of the invite-only Global Services, to 32,000 qualifying points, up from 28,000 this year.

— CNBC's Caleigh Keating contributed to this article.

The market expects Southwest Airlines (LUV - Free Report) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.

The earnings report, which is expected to be released on October 21, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus EstimateThis airline is expected to post quarterly earnings of $0.61 per share in its upcoming report, which represents a year-over-year change of +454.6%.

Revenues are expected to be $8.26 billion, up 18.8% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 23.35% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Southwest?For Southwest, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -4.13%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination makes it difficult to conclusively predict that Southwest will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Southwest would post earnings of $0.52 per share when it actually produced earnings of $0.94, delivering a surprise of +80.77%.

Over the last four quarters, the company has beaten consensus EPS estimates three times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Southwest doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

An Industry Player's Expected ResultsAnother stock from the Zacks Transportation - Airline industry, United Airlines (UAL - Free Report) , is soon expected to post earnings of $2.6 per share for the quarter ended September 2026. This estimate indicates a year-over-year change of -6.5%. Revenues for the quarter are expected to be $17.84 billion, up 17.2% from the year-ago quarter.

The consensus EPS estimate for United has been revised 44.3% lower over the last 30 days to the current level. However, a lower Most Accurate Estimate has resulted in an Earnings ESP of -0.33%.

This Earnings ESP, combined with its Zacks Rank #5 (Strong Sell), makes it difficult to conclusively predict that United will beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

A Southwest Airlines plane approaches Ronald Reagan Washington National Airport near Alexandria, Virginia, U.S., December 24, 2025. REUTERS/Ken Cedeno/File Photo Purchase Licensing Rights, opens new tab

SummaryCompaniesSouthwest has discussed launching long-haul service within roughly three years, sources sayJets from lessors or the secondary market could accelerate a launch despite tight Dreamliner availabilityNew aircraft type could require added regulatory, labor and operational workCHICAGO/MONTREAL, Oct 8 (Reuters) - Southwest Airlines (LUV.N), opens new tab is leaning toward Boeing's (BA.N), opens new tab 787 ​Dreamliner as its first widebody jet as it weighs launching long-haul international flights, according to three people familiar with the carrier's fleet ‌planning.

The people, who declined to be named because the deliberations are private, cautioned that no final aircraft decision has been made. The choice would ultimately rest with Southwest's board, which last year formed a Fleet Oversight Committee to help oversee the company's aircraft fleet acquisition strategy.

Sign up here.

Southwest has not publicly named an aircraft for long-haul flying. In September, Chief Financial Officer ​Tom Doxey said long-haul international service was among a range of options under consideration but that no decision had been made.

One of the people ​said Southwest has contemplated a fleet of dozens of 787s.

Southwest has also examined how quickly it could obtain aircraft, ⁠including through lessors or the secondary market, according to two of the people. Reuters could not determine which 787 variant it is considering or whether any ​leasing arrangements have been made.

Southwest did not directly address questions about the 787, saying in a statement, "We do not have any news forthcoming related to our fleet ​plans." Boeing referred questions about the fleet plans to the carrier. Airbus (AIR.PA), opens new tab said it does not comment on discussions with airlines.

The deliberations would take Southwest's overhaul into a new phase. The airline has added assigned seating and extra-legroom seats and announced airport lounges and plans for a premium credit card as it seeks to attract higher-spending travelers.

A widebody fleet would ​take Southwest into long-haul international flying and more direct competition with larger US rivals. Southwest has publicly discussed long-haul expansion as part of a broader ​effort to give customers fewer reasons to book with competitors while strengthening its Rapid Rewards loyalty program and co-branded credit-card business.

CEO Bob Jordan has said Southwest does not need a ‌long-haul network ⁠comparable with those of Delta Air Lines (DAL.N), opens new tab, United Airlines (UAL.O), opens new tab or American Airlines (AAL.O), opens new tab. In May, he said 8 to 12 long-haul destinations could cover much of where Southwest customers want to travel.

BOEING VERSUS AIRBUSSouthwest currently operates an all-Boeing 737 fleet, but Airbus has been aggressively courting the airline as it evaluates future fleet needs, according to people familiar with the discussions. They said the A321XLR and A330neo could serve its long-haul needs, while the smaller A220 has been pitched for ​other parts of its network.

Choosing Airbus would ​require Southwest to diversify its fleet. ⁠Those people said the 787 has appeared to hold the stronger position in the discussions.

Southwest's pilot union has publicly indicated that more than one path is being examined. Jody Reven, president of the Southwest Airlines Pilots Association, said in ​a recent union podcast that the company had discussed both a "large aircraft" and a "narrow-body long-haul aircraft" as part of ​its future plans.

AVAILABILITY ⁠COULD SHAPE TIMINGThe long-haul plan has been discussed on a roughly three-year timetable, one of the people said. But aircraft availability could shape the timing.

Boeing has said the 787 is sold out through the end of the decade.

One of the people said Southwest has explored obtaining some Dreamliners through lessors, potentially allowing an earlier launch. Another ⁠said aircraft ​from the secondary market had been considered for the initial fleet.

Adding a 787 widebody would be ​a bigger undertaking than expanding Southwest's current 737 operation. Southwest has said adding a new aircraft type could require new maintenance and training programs, regulatory approvals and union negotiations over pay and ​work rules.

Reporting by Rajesh Kumar Singh in Chicago and Allison Lampert in Montreal; Additional reporting by Tim Hepher in Paris; Editing by Joe Brock and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles., opens new tab

This page has not been authorized, sponsored, or otherwise approved or endorsed by the companies represented herein. Each of the company logos represented herein are trademarks of Microsoft Corporation; Dow Jones & Company; Nasdaq, Inc.; Forbes Media, LLC; Investor's Business Daily, Inc.; and Morningstar, Inc.

Copyright 2026 Zacks Investment Research 101 N Wacker Drive, Floor 15, Chicago, IL 60606

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +23.86% per year. These returns cover a period from January 1, 1988 through September 7, 2026. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Zacks may license the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer.

Visit Performance Disclosure for information about the performance numbers displayed above.

Visit www.zacksdata.com to get our data and content for your mobile app or website.

Real time prices by BATS. Delayed quotes by Sungard.

NYSE and AMEX data is at least 20 minutes delayed. NASDAQ data is at least 15 minutes delayed.

This site is protected by reCAPTCHA and the Google Privacy Policy, DMCA Policy and Terms of Service apply.

Southwest is turning constant pings and burnout into over 185 million reasons to take a vacation

, /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) announces a new brand campaign today called "Enter Airplane Mode" inviting travelers to escape the daily grind as constant pings, packed calendars, and always-on routines continue to fuel real burnout. In a Southwest®-sponsored survey¹, 76% of respondents said they are experiencing burnout and 68% of respondents believe a trip is one way they can regain control of their time. With flexible policies including no change² or cancel fees³, an expansive domestic network⁴, and the best Crew in the sky⁵, Southwest has stepped in to turn daily distractions into vacations.

Southwest Airlines announces a new brand campaign today called “Enter Airplane Mode” inviting travelers to escape the daily grind as constant pings, packed calendars, and always-on routines continue to fuel real burnout.

In a Southwest®-sponsored survey¹, 76% of respondents said they were experiencing burnout, and 68% believed a trip could help them regain control of their time. "As the airline that democratized the skies, Southwest Airlines® has always helped make the dream trip a reality and our new campaign, 'Enter Airplane Mode,' encourages Customers to recognize when they're approaching a breaking point and to turn that moment into their booking point," said Sabrina Callahan, Senior Vice President and Chief Digital & Marketing Officer. "With a Customer extension called 'Notification Vacation' we are taking it one step further from simply encouraging you to take the trip to helping you bring it to fruition."

Notification Vacation offers an opportunity for Customers to set aside the burnout and finally take the trip. With an interactive online activation that converts notifications into Rapid Rewards® points, Customers can upload a screenshot of their homepage notifications and receive Rapid Rewards points.⁶ It is an easy way to turn constant pings into a positive, reminding busy Americans that the reset they need may be closer than they think. Customers can also take a Burnout Quiz⁷ to understand their level of burnout and find inspiration for their next relaxing getaway. Together, Notification Vacation and the Burnout Quiz offer Customers the chance to receive more than 185 million Rapid Rewards points total, with limits applying per Rapid Rewards Member.⁸

The "Enter Airplane Mode" campaign spots were shot by Hollywood directors Will Speck and Josh Gordon and voiced by Adam Scott, whose recent role in a workplace-centered series adds a culturally relevant wink to the message about disconnecting from work and reconnecting with life beyond it. Created with ad agency GSD&M, the campaign begins airing today and brings "Enter Airplane Mode" to life through relatable moments of everyday stressors, from overloaded calendars to endless meetings and packed commutes. Southwest is also working with creator agency, Later, and media agency, Spark Foundry, to bring the campaign to life as part of a full 360-degree effort.

Southwest continues to make getting away easier with purposeful, feedback-driven enhancements—from updated boarding and assigned seating to onboard investments such as free WiFi for Rapid Rewards® Members thanks to T-Mobile®⁹ and Starlink's fastest WiFi in the sky. Together with its flexible policies, expansive domestic network, and Hospitality that defines the brand, Southwest is making it easier for Customers to disconnect and enter airplane mode.

Visit the Southwest Newsroom at swamedia.com for multimedia assets and other Company news.

ABOUT SOUTHWEST AIRLINES CO.

Southwest Airlines Co. operates one of the world's most admired and awarded airlines, offering its one-of-a-kind value and Hospitality at 120 airports across 12 countries. Southwest took flight in 1971 to democratize the sky through friendly, reliable, and low-cost air travel and now carries more air travelers flying nonstop within the United States than any other airline⁴. By empowering its more than 73,000¹⁰ People to deliver unparalleled Hospitality, the maverick airline cherishes a passionate loyalty among more than 134 million Customers carried in 2025. Southwest leverages a unique legacy and mission to serve communities around the world including harnessing the power of its People and Purpose to put communities at the Heart of its success. Learn more by visiting Southwest.com/citizenship.

1. Based on a Southwest-sponsored online survey conducted in August 2026 with 2,000+ adults aged 18-64 in the U.S.
2. Fare difference may apply.
3. Basic fare round trip bookings must be canceled or upgraded. Cancel 10+ minutes before departure to avoid forfeiture of travel funds.
4. Based on U.S. Dept. of Transportation quarterly Airline Origin & Destination Survey as of Q4 2025.
5. Southwest Airlines Co. ranked first in Best Cabin Crew through USA Today's 2025 10 Best.
6. NO PURCHASE NECESSARY. Open to Rapid Rewards® Members; 18+; 50 US/DC. Limit one (1) entry per Member. Minimum award: 1,000 Rapid Rewards points. Maximum award: 10,000 Rapid Rewards points per Member. Total points available: 150,000,000. Points available while supplies last; daily availability may be limited. Points subject to verification. Void where prohibited. See Official Terms and Conditions. 
7. NO PURCHASE NECESSARY. Open to Rapid Rewards® Members; 18+; 50 US/DC. Limit one (1) quiz completion per Member. Each eligible, verified completion receives 500 Rapid Rewards points, subject to availability. Total points available: 37,000,000. Once all points have been awarded, the promotion ends. Points subject to verification; see Terms for eligibility, fraud prevention, and disqualification provisions. Void where prohibited. See Official Terms and Conditions. 
8. 187 million total points represents the combined maximum available across two separate promotions: up to 150 million points through Notification Vacation and up to 37 million points through the Burnout Quiz. Individual awards are capped at 10,000 points for Notification Vacation Promotion and 500 points for Burnout Quiz Promotion. Separate eligibility, entry, award, and point-limit terms apply. Points are available while supplies last, and no individual may receive the combined total. See each promotion's Official Terms and Conditions for full details, including per-Member point caps and entry limits.
9. Where available. Available only on WiFi-enabled designated aircraft.
10. Fulltime-equivalent active Employees as of June 30, 2026.

Visit the Southwest Newsroom at swamedia.com.

SOURCE Southwest Airlines Co.

DALLAS, Oct. 1, 2026 /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) will release its third quarter 2026 financial results after the market closes on Wednesday, October 21, 2026. Management will discuss the results during a conference call on Thursday, October 22, 2026.

Southwest Airlines Q3 2026 Earnings Conference Call
Thursday, October 22, 2026
10:00 AM Eastern Time
Visit Southwest Airlines Investor Relations for the Webcast 

Registration for this event begins 20 minutes before the call. A replay of the webcast will be available on the Southwest Airlines Investor Relations website.

SOURCE Southwest Airlines Co.

Southwest Airlines is rated a buy with 15–20% upside, driven by a commercial overhaul yielding record unit revenue and a resilient profit mix. LUV's transformation into a merchandised airline, with new fare ladders and ancillary products, has produced 20% adjusted unit revenue growth on flat capacity. Despite a $900M fuel headwind, LUV expanded operating income 27% and operating margin, leveraging its investment-grade balance sheet and disciplined capacity management.

Bank of America Corp DE decreased its holdings in shares of Southwest Airlines Co. (NYSE:LUV – Free Report) by 15.9% in the 2nd quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The fund owned 5,276,832 shares of the airline’s stock after selling 996,251 shares during the quarter. Bank of America Corp DE owned about 1.08% of Southwest Airlines worth $271,335,000 at the end of the most recent quarter.

A number of other institutional investors and hedge funds also recently added to or reduced their stakes in LUV. MCF Advisors LLC increased its position in shares of Southwest Airlines by 28.5% during the fourth quarter. MCF Advisors LLC now owns 915 shares of the airline’s stock valued at $38,000 after acquiring an additional 203 shares during the last quarter. Annis Gardner Whiting Capital Advisors LLC raised its holdings in shares of Southwest Airlines by 1.5% in the 4th quarter. Annis Gardner Whiting Capital Advisors LLC now owns 16,437 shares of the airline’s stock valued at $682,000 after buying an additional 235 shares during the period. Grove Bank & Trust raised its holdings in shares of Southwest Airlines by 109.4% in the 2nd quarter. Grove Bank & Trust now owns 871 shares of the airline’s stock valued at $45,000 after buying an additional 455 shares during the period. Resona Asset Management Co. Ltd. lifted its stake in Southwest Airlines by 8.0% during the 1st quarter. Resona Asset Management Co. Ltd. now owns 6,738 shares of the airline’s stock worth $245,000 after acquiring an additional 498 shares in the last quarter. Finally, EverSource Wealth Advisors LLC grew its position in Southwest Airlines by 11.0% in the 1st quarter. EverSource Wealth Advisors LLC now owns 5,131 shares of the airline’s stock valued at $193,000 after acquiring an additional 508 shares in the last quarter. Hedge funds and other institutional investors own 80.82% of the company’s stock.

Analyst Ratings Changes A number of analysts have issued reports on LUV shares. Raymond James Financial cut their price target on shares of Southwest Airlines from $60.00 to $54.00 and set an “outperform” rating on the stock in a research note on Monday, August 24th. Wells Fargo & Company raised their price objective on shares of Southwest Airlines from $44.00 to $50.00 and gave the company an “equal weight” rating in a research note on Tuesday, June 30th. Susquehanna lifted their price objective on shares of Southwest Airlines from $44.00 to $55.00 and gave the company a “neutral” rating in a report on Tuesday, July 7th. Zacks Research raised shares of Southwest Airlines from a “strong sell” rating to a “hold” rating in a research note on Thursday, June 25th. Finally, Weiss Ratings upgraded shares of Southwest Airlines from a “hold (c)” rating to a “hold (c+)” rating in a report on Tuesday, August 18th. Nine equities research analysts have rated the stock with a Buy rating, nine have given a Hold rating and four have assigned a Sell rating to the company. Based on data from MarketBeat.com, the company presently has an average rating of “Hold” and an average price target of $48.05.

Read Our Latest Stock Analysis on Southwest Airlines Southwest Airlines Stock Down 0.4% Shares of NYSE:LUV opened at $39.10 on Thursday. The firm’s 50 day moving average price is $43.59 and its 200 day moving average price is $42.87. The stock has a market cap of $19.13 billion, a price-to-earnings ratio of 23.99, a price-to-earnings-growth ratio of 0.37 and a beta of 1.13. Southwest Airlines Co. has a fifty-two week low of $29.26 and a fifty-two week high of $55.11. The company has a quick ratio of 0.42, a current ratio of 0.49 and a debt-to-equity ratio of 0.54.

Southwest Airlines (NYSE:LUV – Get Free Report) last posted its quarterly earnings results on Wednesday, July 22nd. The airline reported $0.94 EPS for the quarter, topping the consensus estimate of $0.52 by $0.42. Southwest Airlines had a net margin of 2.78% and a return on equity of 14.15%. The company had revenue of $8.72 billion during the quarter, compared to analysts’ expectations of $8.58 billion. During the same quarter in the previous year, the business posted $0.43 EPS. The firm’s revenue was up 16.4% on a year-over-year basis. Southwest Airlines has set its FY 2026 guidance at 3.250-4.250 EPS and its Q3 2026 guidance at 0.500-0.750 EPS. As a group, equities research analysts predict that Southwest Airlines Co. will post 3.28 earnings per share for the current fiscal year.

Southwest Airlines Dividend Announcement The firm also recently declared a quarterly dividend, which will be paid on Thursday, September 24th. Shareholders of record on Thursday, September 3rd will be issued a dividend of $0.18 per share. This represents a $0.72 dividend on an annualized basis and a yield of 1.8%. The ex-dividend date of this dividend is Thursday, September 3rd. Southwest Airlines’s payout ratio is 44.17%.

(Free Report)

Southwest Airlines Co is a major U.S. passenger airline headquartered in Dallas, Texas. Operating under the Southwest Airlines brand, the company provides scheduled air transportation for domestic and international travelers and also offers air cargo services.

Southwest was founded in 1967 and began commercial service in 1971, initially connecting Dallas, Houston and San Antonio. The airline expanded its network across the United States and now serves numerous destinations in the United States, Mexico, the Caribbean, Central America and other nearby international markets.

Read More Five stocks we like better than Southwest Airlines 3 Luxury Consumer Brands to Watch in a Beaten-Down Sector Jackson’s Record Quarter Powers the Bull Case Holiday Shopping Is Almost Here—And Target May Be Ready to Win Big AI Panic Hit Tech Stocks—But NVIDIA’s Growth Engine Is Intact

Receive News & Ratings for Southwest Airlines Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Southwest Airlines and related companies with MarketBeat.com's FREE daily email newsletter.

Southwest Airlines Co. (LUV) Morgan Stanley's 14th Annual Laguna Conference September 16, 2026 3:20 PM EDT

Company Participants

Tom Doxey - Executive VP & CFO

Conference Call Participants

Ravi Shanker - Morgan Stanley, Research Division

Presentation

Ravi Shanker
Morgan Stanley, Research Division

Great. Let us switch back to airlines content now and very happy to have at Laguna again, Southwest Airlines and CFO, Tom Doxey. Tom, welcome to Laguna.

Tom Doxey
Executive VP & CFO

Thanks. Really good to be here.

Question-and-Answer Session

Ravi Shanker
Morgan Stanley, Research Division

Absolutely. You guys have been the idiosyncratic story of the industry for the last couple of years now. Obviously, so much going on, a, with macro, b, at Southwest as well. Maybe just to at a high level kind of, how do you spend your time? Kind of what's the split between looking internally? What's the split between refreshing the price chart on the jet fuel versus other macro stuff?

Tom Doxey
Executive VP & CFO

Yes. We'll focus on controlling the things that we can control. And I think we've done really a really good job at that. I mean you mentioned the initiatives. You look at those initiatives that we've rolled in over the last 18 months or so. We were actually asked this morning in one of the investor meetings, okay, we'll talk about one of the ones that didn't go like you thought it would. And as we went through them, they all came in on time, and they all have either met or exceeded the financial estimates that we have put out there. And we've done it also with maintaining the things that have been core to Southwest for 50-plus years now around hospitality and the culture and the customer centricity. We're seeing record numbers for people coming to us now.

Planning a trip just got easier with discounts across the travel experience

, /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) launches the Week of WOW, one of the carrier's biggest sales of the year. Starting today through Sept. 17, Customers can save up to 40% off base fares for flights from Oct. 5, 2026, to March 3, 20271, along with promotions on hotels, rental cars, and Getaways by Southwest™ vacation packages. Check out some of the nonstop routes on sale now available on Southwest.com®, with up to 40% off base fares between:

Austin and San Diego, Nashville and Chicago (Midway), Denver and San Diego, Seattle and Nashville, and Austin and San Jose. "At Southwest, we know Customers want flexibility, meaningful rewards, and an experience that makes travel feel easy from the moment they book to the moment they arrive," said Sabrina Callahan, Senior Vice President and Chief Digital & Marketing Officer. "Whether Customers are planning fall getaways, holiday visits, or business trips for the months ahead, the Week of WOW brings together exceptional value, new benefits, and the warm Hospitality Southwest only our Employees can deliver. It's another example of how we're giving Customers more choice, more flexibility, and more ways to get the most from every trip."

More Than a Fare Sale
Customers can shop at Southwest.com for discounts on:

Fares: Customers can save up to 40% off base fares for select flights from Oct. 5, 2026, to March 3, 2027.1  Rental Cars: Customers can save up to 15% off base rates on three-day or longer car rentals with Enterprise.2   Hotels: Customers can earn 3,000 Rapid Rewards® bonus points or receive a 3,000 Rapid Rewards points discount for hotel stays through Sept. 30, 2027.3  Leave the Planning to Us 
Getaways by Southwest is bringing even more deals to Customers who want to book vacation packages. Customers can save up to $500 on a five-night vacation package for two,4 plus two free checked bags.5  

Unlock More Value as a Rapid Rewards Member
Join Rapid Rewards to unlock access to free WiFi thanks to T-Mobile®,6 tier benefits, and points by flying or spending with eligible partners. Members can purchase points to earn a reward to book their favorite destination or a new Southwest® route. All Rapid Rewards rules and regulations apply at Southwest.com/rrterms. 

ABOUT SOUTHWEST AIRLINES CO.
Southwest Airlines Co. operates one of the world's most admired and awarded airlines, offering its one-of-a-kind value and Hospitality at 120 airports across 12 countries. Southwest took flight in 1971 to democratize the sky through friendly, reliable, and low-cost air travel and now carries more air travelers flying nonstop within the United States than any other airline.7 By empowering its more than 73,0008  People to deliver unparalleled Hospitality, the maverick airline cherishes a passionate loyalty among more than 134 million Customers carried in 2025. Southwest leverages a unique legacy and mission to serve communities around the world including harnessing the power of its People and Purpose to put communities at the Heart of its success. Learn more by visiting Southwest.com/citizenship.

1 Restrictions, exclusions, and blackouts apply. Seats/days/markets limited. 21-day advance purchase. Required. Book by 9/17. Discount applied pre-government taxes/fees. Additional fees may apply.
2 Valid at participating Enterprise airport locations. Valid for bookings Sept. 14 to Sept. 21, 2026, and vehicle pickup through Dec. 15, 2026. Taxes and fees excluded. Terms and exclusions apply. 
3 Book Sept. 14, 2026, to Sept. 21, 2026. Terms apply. All Rapid Rewards rules and regulations apply and can be found at southwest.com/rrterms.
4 Getaways by Southwest™ Customers receive their first and second checked bags for free. Weight and size limits apply. Additional allowances, benefits, and/or exceptions may apply. Learn more.
5 Based on 2-person, 5-night minimum. Restrictions, exclusions, and blackouts may apply. Seats/days/markets limited. 1-day advance purchase required. Additional fees may apply. See Getaways by Southwest terms and conditions.
6 Where available. Available only on WiFi-enabled designated aircraft.
7 Based on U.S. Dept. of Transportation quarterly Airline Origin & Destination Survey as of Q4 2025
8 Fulltime-equivalent active Employees as of June 30,2026.

SOURCE Southwest Airlines Co.

Amundi decreased its holdings in shares of Southwest Airlines Co. (NYSE:LUV – Free Report) by 70.6% in the 2nd quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The fund owned 429,332 shares of the airline’s stock after selling 1,032,012 shares during the quarter. Amundi owned approximately 0.09% of Southwest Airlines worth $22,076,000 at the end of the most recent quarter.

Other large investors also recently bought and sold shares of the company. AQR Capital Management LLC grew its position in Southwest Airlines by 100.6% in the 1st quarter. AQR Capital Management LLC now owns 39,347 shares of the airline’s stock valued at $1,303,000 after buying an additional 19,729 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its position in Southwest Airlines by 5.4% during the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 61,060 shares of the airline’s stock worth $2,050,000 after buying an additional 3,141 shares during the last quarter. Empowered Funds LLC lifted its stake in shares of Southwest Airlines by 7.6% in the 1st quarter. Empowered Funds LLC now owns 7,459 shares of the airline’s stock worth $250,000 after acquiring an additional 527 shares during the period. EverSource Wealth Advisors LLC raised its holdings in Southwest Airlines by 73.4% during the second quarter. EverSource Wealth Advisors LLC now owns 5,690 shares of the airline’s stock worth $185,000 after purchasing an additional 2,408 shares in the last quarter. Finally, First Trust Advisors LP boosted its holdings in Southwest Airlines by 47.4% in the 2nd quarter. First Trust Advisors LP now owns 307,602 shares of the airline’s stock valued at $9,979,000 after purchasing an additional 98,986 shares in the last quarter. Institutional investors and hedge funds own 80.82% of the company’s stock.

Wall Street Analysts Forecast Growth Several research analysts have issued reports on LUV shares. Barclays cut their price objective on Southwest Airlines from $65.00 to $58.00 and set an “overweight” rating for the company in a research report on Friday. Jefferies Financial Group upped their target price on shares of Southwest Airlines from $44.00 to $50.00 and gave the stock a “hold” rating in a research report on Wednesday, July 1st. Raymond James Financial reduced their price target on shares of Southwest Airlines from $60.00 to $54.00 and set an “outperform” rating for the company in a research report on Monday, August 24th. Wall Street Zen lowered Southwest Airlines from a “buy” rating to a “hold” rating in a research note on Saturday, September 5th. Finally, Susquehanna upped their price target on Southwest Airlines from $44.00 to $55.00 and gave the stock a “neutral” rating in a report on Tuesday, July 7th. Nine equities research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and four have given a Sell rating to the company’s stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus price target of $48.05.

Get Our Latest Research Report on LUV Southwest Airlines Trading Up 1.3% NYSE LUV opened at $39.19 on Friday. Southwest Airlines Co. has a one year low of $29.26 and a one year high of $55.11. The company has a 50-day simple moving average of $44.21 and a 200-day simple moving average of $43.16. The company has a debt-to-equity ratio of 0.54, a quick ratio of 0.42 and a current ratio of 0.49. The firm has a market capitalization of $19.17 billion, a PE ratio of 24.04, a price-to-earnings-growth ratio of 0.36 and a beta of 1.13.

Southwest Airlines (NYSE:LUV – Get Free Report) last issued its quarterly earnings data on Wednesday, July 22nd. The airline reported $0.94 earnings per share for the quarter, beating the consensus estimate of $0.52 by $0.42. The firm had revenue of $8.72 billion for the quarter, compared to the consensus estimate of $8.58 billion. Southwest Airlines had a net margin of 2.78% and a return on equity of 14.15%. Southwest Airlines’s quarterly revenue was up 16.4% compared to the same quarter last year. During the same period last year, the firm posted $0.43 EPS. Southwest Airlines has set its FY 2026 guidance at 3.250-4.250 EPS and its Q3 2026 guidance at 0.500-0.750 EPS. On average, equities analysts forecast that Southwest Airlines Co. will post 3.28 earnings per share for the current year.

Southwest Airlines Announces Dividend The firm also recently declared a quarterly dividend, which will be paid on Thursday, September 24th. Shareholders of record on Thursday, September 3rd will be given a $0.18 dividend. The ex-dividend date is Thursday, September 3rd. This represents a $0.72 annualized dividend and a yield of 1.8%. Southwest Airlines’s payout ratio is 44.17%.

(Free Report)

Southwest Airlines Co is a major U.S. passenger airline headquartered in Dallas, Texas. Operating under the Southwest Airlines brand, the company provides scheduled air transportation for domestic and international travelers and also offers air cargo services.

Southwest was founded in 1967 and began commercial service in 1971, initially connecting Dallas, Houston and San Antonio. The airline expanded its network across the United States and now serves numerous destinations in the United States, Mexico, the Caribbean, Central America and other nearby international markets.

Read More Five stocks we like better than Southwest Airlines Block Makes a Federal Trust Bank Move That Could Reshape Its Fintech Model Kroger’s Textbook Entry for Buy-and-Hold Investors AST SpaceMobile Looks to Extend Its 30-Day FCC Satellite Testing Window Amgen Drops 10% on a Trial It Didn’t Even Run

Receive News & Ratings for Southwest Airlines Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Southwest Airlines and related companies with MarketBeat.com's FREE daily email newsletter.

2.05K Followers

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Southwest Airlines (LUV.N) on Wednesday unveiled plans to open its first-ever airport lounges, as the carrier steps up efforts to attract higher-spending premium travelers ​and diversify revenue streams.

The airline, which has been working to shed ‌its low-cost image and boost ancillary revenue through assigned seating, extra-legroom seats and other product enhancements, said it would partner with JPMorgan Chase (JPM.N) to launch its first airport lounges.

Airport ​lounges have become a powerful attraction for travelers as they offer ​a quieter place to work or relax, complimentary food and ⁠drinks and a more seamless airport experience. For airlines, they help lock ​in customers, support premium fares and drive spending on lucrative co-branded credit cards.

Southwest ​will roll out a new Chase-issued co-branded credit card in 2027 to provide customers access to its airport lounge network.

It initially plans to open four lounges in Austin, Baltimore, ​Honolulu and Nashville. Construction is underway, with the lounges expected to begin ​opening in late 2027.

Airlines worldwide have been hit by a sharp rise in fuel prices ‌stemming ⁠from the U.S.-Israeli war in Iran, squeezing already thin margins.

Carriers with a stronger suite of premium offerings are better positioned to weather the pressure as they can lure travelers willing to pay more for higher-margin services such as ​premium seating, lounge access ​and other ⁠upgrades.

Southwest has been overhauling its business to better compete with the network carriers following pressure from activist investor Elliott ​Investment Management and weaker profit margins after the pandemic.

CEO Bob ​Jordan signaled in ⁠May that Southwest could add more cabin options, including "true first class," and is likely over time to delve into long-haul international flying. He, however, said those ⁠were ​still ideas.

Jordan has previously acknowledged that the carrier ​loses customers to rivals because it does not serve destinations such as London or offer premium ​amenities, including airport lounges.

Four initial lounges are being built as the airline hopes to lure fliers to a new high-end credit card it plans to launch next year.

Southwest Airlines just fell harder than every major carrier and the entire sector fund combined, and the reason traces back to one strategic decision the airline made long before oil prices turned ugly.

Southwest Airlines (NYSE:LUV | LUV Price Prediction) stock has emerged as the sector’s biggest laggard over the past month, and the reason pertains to a single strategic decision made well before crude oil turned higher this summer.

Southwest Airlines shares are down 2% to $38.67 in Monday midday trading, and the stock has fallen 14% over the past month. That trails the main U.S. carriers and a well-known airline sector fund.

The U.S. Global Jets ETF (NYSEARCA:JETS) is down 9% to $28.50 over the past month, so the entire group repriced together. Southwest Airlines stock simply fell the most, and the gap between Southwest Airlines and the fund is what this article has to explain.

Fuel Repricing Hit the Whole Group The peer moves confirm a broad sector event. Delta Air Lines (NYSE:DAL) stock is down 11% over the past month. American Airlines Group (NASDAQ:AAL) stock is down 12% over the past month.

United Airlines Holdings (NASDAQ:UAL) stock is down 11% over the past month. Crude oil strengthened through the month, and U.S. strikes on Iranian targets pushed WTI crude oil above $86 in the current session. Jet fuel is an airline’s largest variable cost, which is why the whole group fell together.

Why Southwest Airlines Fell Hardest Southwest Airlines discontinued its fuel hedging program, leaving it fully exposed to price swings that hedged peers can absorb more gradually. That’s the cleanest available explanation for Southwest Airlines underperforming three larger carriers and the sector fund at the same time.

The guidance reset amplified the pressure. On July 23, Southwest Airlines replaced its prior full-year 2026 adjusted EPS guidance of at least $4 with a range of $3.25 to $4.25, reflecting the forward fuel curve as of July 17 and an estimated year-to-date fuel headwind of $1.33 per share. That lowered the earnings bar just before this month’s decline.

The bull side is genuinely strong. Southwest Airlines’ second-quarter 2026 adjusted EPS reached $0.94, up 120% year over year, with adjusted operating revenue setting a record of $8.7 billion on capacity growth of just 0.2% and adjusted operating margin expanding to 6.7%. CEO Bob Jordan stated on the second-quarter 2026 call, “While fuel prices have remained volatile and elevated, industry recapture has been swift and pricing has remained sticky.” Southwest Airlines’ managed business revenue grew 30% year over year and Southwest Airlines ended the quarter with $5.3 billion of liquidity.

The bear side is equally direct. The operating improvement is real, yet fuel is outrunning it, and with no hedges Southwest Airlines has no buffer if crude oil keeps climbing. Southwest Airlines also guided fourth-quarter capacity up 4% to 4.5% year over year, its largest sequential third-to-fourth-quarter increase, adding seats into a market where costs are rising.

What to Watch Next Investors can watch for the next monthly jet fuel print and any Southwest Airlines commentary on whether industry pricing continues to recapture the fuel move. If crude oil holds above $86, the fuel curve embedded inside the $3.25 to $4.25 EPS range gets meaningfully harder to hit, and the same math applies to Delta Air Lines, American Airlines Group and United Airlines Holdings.

Cautious position sizing should be considered with airline stocks now, including LUV stock. With no hedge program to smooth results, Southwest Airlines carries more single-variable risk than Delta Air Lines or United Airlines Holdings on any given fuel move, so anyone weighing a starter position should size to that volatility rather than to the second-quarter headline. The next scheduled catalyst is Q3 2026 earnings, when management could narrow or refresh the full-year range and either validate the transformation thesis or confirm that fuel has taken over the story.

Contact [email protected] for any questions or corrections.