Southwest Airlines cut its 2026 profit guidance to between $2.60 and $2.85 a share, citing surging jet fuel costs that are pressuring carriers across the aviation sector. CEO Bob Jordan reported that passenger bookings remain resilient despite higher fares.
Updated October 22, 2026
The downward revision marks a steep drop from the carrier’s previous July forecast, which anticipated earnings between $3.25 and $4.25 a share, and falls well below earlier projections of $4 a share.
Southwest expects to pay as much as $4.55 a gallon for jet fuel in the fourth quarter, outpacing the $3.92 per gallon it paid in the third quarter and exceeding its own prior estimates of $3.70 to $3.75. United Airlines anticipates fourth-quarter fuel costs of $4.80 a gallon, while Alaska Airlines guides to between $4.65 and $4.85.
Southwest Reports Third-Quarter Financial Results
According to consensus estimates from LSEG, the carrier reported adjusted earnings per share of 66 cents, beating the 58 cents expected by Wall Street. Adjusted revenue reached $8.42 billion, edging past the $8.25 billion anticipated by analysts.
Operating revenue rose 21.2% to $8.4 billion for the quarter, generating net income of $270 million, or 55 cents a share. That figure marks an increase from $54 million, or 10 cents a share, during the same period a year earlier. Adjusted for one-time items, the carrier reported 66 cents a share.
Fares Climb as Carrier Abandons Historic Open Seating Policies
Average passenger fares climbed to $231.69 in the third quarter, representing a nearly 27% increase over the same period in 2025. A company spokesman clarified that the average fare figure excludes add-on fees. Concurrently, the total number of revenue passengers carried declined by 3.2% to 33.47 million people.
Under pressure to grow revenue, the carrier has moved away from its historic policies of open seating and two free checked bags per passenger. The airline now charges for many seat assignments and levies bag fees, bringing its structure closer to major competitors.
Airlines Push Upmarket and Revise Profit Outlooks
The carrier plans to open airport lounges in four U.S. cities next year, overhaul its loyalty program, and evaluate long-haul international routes. Chief Financial Officer Tom Doxey noted at a September investor conference that the carrier retains room to raise airfares further to offset fuel expenses. Meanwhile, CEO Bob Jordan has floated the possibility of operating eight to 12 long-haul international flights depending on customer demand, with Reuters reporting that the airline is considering a Boeing 787 order to support that strategy.
Delta Air Lines and United Airlines also trimmed their profit outlooks for the remainder of the year during their respective third-quarter earnings reports, with both reporting top- and bottom-line misses. Southwest expects fourth-quarter per-share adjusted earnings of between 55 cents and 80 cents, with unit revenue projected to rise as much as 21% year over year and capacity growth targeted at up to 4%.
Jordan announced that Southwest will host a capital markets day in New York in March 2027.
Update (October 22, 2026)
According to CNBC, American Airlines forecast deeper full-year losses and plans to slow capacity growth next year. The carrier now expects an adjusted full-year loss between $1 and $1.60 a share, compared to its previous July forecast ranging from earnings of up to 65 cents to a loss of 65 cents. American reported a third-quarter net loss of $269 million, or 41 cents a share, on revenue of $16.34 billion, beating Wall Street estimates for a loss of 35 cents a share on revenue of $16.22 billion. Its third-quarter fuel bill jumped 67.5% to $4.64 billion. For the fourth quarter, American anticipates an adjusted loss between 50 cents and $1.10 a share, with revenue increasing up to 22.5% and capacity growing 5.5% to 6.5%.
