Southwest Airlines This month became the third major U.S. airline to cut its 2026 profit forecast due to rising fuel prices, but CEO Bob Jordan said travelers continued to book despite higher fares.
The carrier expects to earn between $2.60 and $2.85 per share on an adjusted basis this year, down from its July forecast of between $3.25 and $4.25 per share.
Here’s what Southwest reported for the third quarter compared to Wall Street expectations, according to LSEG consensus estimates:
- Earnings per share: 66 cents adjusted versus 58 cents expected
- Income: $8.42 billion adjusted versus $8.25 billion expected
Southwest expects fourth-quarter adjusted earnings per share of between 55 cents and 80 cents and unit revenue, a gauge of airfares, up 21% from a year earlier. It said it plans to increase capacity by up to 4% year over year.
“Demand remained strong as we exceeded last year’s baggage fees and other business initiatives, reinforcing our belief that the earnings capacity we have built is sustainable, 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 nearly 27% from the same quarter of 2025. A spokesperson said that figure does not include additional fees. The number of paying passengers carried decreased by 3.2% to 33.47 million people.
Under pressure to increase revenue, Southwest has overhauled its long-standing business model in recent years, abandoning old policies such as two free checked bags per passenger and free seating. Instead, Southwest began charging for many seat assignments and added baggage fees, similar to those of its major competitors.
For the third quarter, Southwest reported net income of $270 million, or 55 cents per share, compared with $54 million, or 10 cents per share, a year earlier. Revenue rose more than 21% to $8.42 billion.
Including one-time items, Southwest reported 66 cents per share.
Delta Airlines And United Airlines They also reduced their earnings outlook for the rest of the year when they reported their third-quarter results. Both airlines reported revenue and bottom line failures for the third quarter.
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