Southwest Cuts 2026 Profit Forecast on Fuel Costs — SkimNews
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- Southwest Airlines cut its 2026 adjusted earnings forecast to $2.60–$2.85 per share from $3.25–$4.25, citing significantly higher fuel prices.
- Southwest Airlines reported third-quarter adjusted earnings of 66 cents per share, beating Wall Street's 58-cent expectation on $8.42 billion in revenue versus $8.25 billion forecast.
- Southwest Airlines said its average passenger fare rose nearly 27% year over year to $231.69 in Q3, though add-on fees are not included in that figure.
- Bob Jordan, Southwest’s CEO, stated that demand remains strong despite higher fares, attributing resilience to the airline’s commercial initiatives like bag fees and paid seat assignments.
- Southwest Airlines expects Q4 adjusted earnings between 55 cents and 80 cents per share, with unit revenue up as much as 21% and capacity growing up to 4% year over year.
- Delta Air Lines and United Airlines also downgraded their full-year profit outlooks after reporting Q3 top- and bottom-line misses, aligning with Southwest’s fuel-cost concerns.
Why it matters: Airlines are absorbing higher fuel costs that are eroding future profits, but strong demand and pricing power—evidenced by Southwest’s 27% fare increase and earnings beat—are helping offset near-term pressure. This divergence shows consumers are still flying despite cost hikes, altering expectations for airline profitability in 2026.
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