Southwest Airlines announced a reduction to its 2026 profit forecast, joining Delta Air Lines and United Airlines in cutting earnings expectations due to higher fuel costs. The carrier now anticipates adjusted earnings between $2.60 and $2.85 per share for the full year, down substantially from its July projection of $3.25 to $4.25 per share.
CEO Bob Jordan indicated that passenger demand has remained resilient despite the financial pressures, with strong bookings reported across all geographic regions and product offerings. The airline expects fourth-quarter adjusted earnings of between 55 cents and 80 cents per share, along with unit revenue increases of up to 21% compared to the prior year. Capacity is projected to grow by up to 4% year over year.
Third-quarter results showed net income of $270 million, or 55 cents per share, compared with $54 million or 10 cents per share in the prior-year period. Revenue increased more than 21% to $8.42 billion. On an adjusted basis, the airline reported 66 cents per share. Average passenger fares reached $231.69, representing a nearly 27% increase from the same quarter of 2025, though this figure excludes ancillary fees.
Southwest has undergone significant changes to its business model in recent years, transitioning away from its historical practices of providing two free checked bags and open seating. The carrier now charges for many seat assignments and imposes bag fees comparable to industry competitors. Revenue passenger numbers declined 3.2% to 33.47 million during the quarter, offsetting gains achieved through higher fares and increased ancillary revenue.
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