Southwest Airlines has cut its 2026 profit forecast due to higher fuel prices, predicting earnings between $2.60 and $2.85 cents a share this year, down from $3.25 to $4.25 a share in July. CEO Bob Jordan attributes the earnings power Southwest has built to higher fuel costs, despite strong demand and revenue growth. Southwest has been remaking its business model in recent years, scrapping policies like free checked bags and open seating, and charging for seat assignments and a bag fee.
Key points
Southwest Airlines has cut its 2026 profit forecast due to higher fuel prices, predicting…: Southwest Airlines has cut its 2026 profit forecast due to higher fuel prices, predicting earnings between $2.60 and $2.85 cents a share this year, down from $3.25 to $4.25 a share in July.
CEO Bob Jordan attributes the earnings power Southwest has built to higher fuel costs, de…: CEO Bob Jordan attributes the earnings power Southwest has built to higher fuel costs, despite strong demand and revenue growth.
Southwest has been remaking its business model in recent years, scrapping policies like f…: Southwest has been remaking its business model in recent years, scrapping policies like free checked bags and open seating, and charging for seat assignments and a bag fee.
Sources checked by our analysis pipeline: 1
Southwest Airlines became the third major U.S. airline this month to cut its 2026 profit forecast due to higher fuel prices.
The carrier expects to earn between $2.60 and $2.85 cents 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 expected
- Revenue: $8.42 billion adjusted vs. $8.25 billion expected
"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," CEO Bob Jordan said in an earnings release.
Under pressure to grow revenue, Southwest has been remaking its longtime business model in 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.
IBM reports a 5% revenue increase over the previous year, with net income up 26%, software revenue rising by 8%, and infrastructure revenue climbing by 4%, marking a positive trend in the company's financial health and operational performance.
Meta, the parent company of Facebook and Instagram, faced a significant financial setback of $9.89 billion due to a child safety lawsuit settlement, leading to a $22.89 billion loss in income from operations. Despite this, Meta managed to maintain a strong financial performance, attributing its success to investments in AI and personal superintelligence.