Southwest Airlines posted a 9.4% increase in second-quarter net income compared with the prior year, reaching $233 million or 47 cents per share. The carrier’s revenue climbed 16.4% to $8.4 billion during the period, driven significantly by higher average passenger fares that rose almost 21% to $225.61 from $186.65 a year earlier.
However, the airline faced considerable headwinds from escalating operational expenses. Southwest’s fuel bill surged 67% to $2.22 billion in the second quarter compared with the same period a year prior, representing a substantial cost pressure on the carrier’s operations. On an adjusted basis, the airline reported 94 cents per share, which included an adjustment related to customers redeeming flight credits at higher-than-anticipated levels.
Looking ahead, Southwest provided guidance that fell short of Wall Street expectations. The airline forecast third-quarter adjusted earnings between 50 cents and 75 cents per share, trailing the 82 cents that analysts had anticipated. The Dallas-based carrier projected third-quarter sales would increase between 17.5% to 19.5% compared with a year earlier. In terms of capacity planning, Southwest indicated it would contract capacity by no more than 1% or keep it essentially flat relative to the third quarter of 2025.
The company attributed part of its earnings pressure to policy changes implemented in mid-2025 regarding flight credits. Southwest modified its prior approach by imposing expiration dates on flight credits across many ticket classes, a shift that contributed to elevated redemption activity during the second quarter.
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