Southwest's New Fees and Fare Hikes Offset an $889 Million Fuel Bill
The airline said higher fares and new fees are helping offset nearly $900 million in added fuel costs, but third-quarter profit guidance trailed estimates.
- On Wednesday, Southwest Airlines forecast third-quarter profit below Wall Street expectations, as renewed U.S.-Iran fighting sent fuel prices higher, eclipsing strong travel demand and seating gains.
- Oil prices approached a six-week high this week as hostilities disrupted shipping through the Strait and Hormuz, complicating fuel cost forecasting for airlines industry-wide.
- Southwest reported second-quarter Revenue of $8.43 billion and Adjusted EPS of 94 cents, outperforming estimates despite nearly $900 million in additional fuel expenses year-over-year.
- To offset soaring fuel costs, the carrier plans to raise fares and baggage fees while contracting capacity 1% compared with third-quarter 2025.
- CEO Bob Jordan will discuss strategies on an earnings call at 10 a.m. today, as the company projects full-year adjusted Earnings between $3.25 and $4.25 per share.
16 Articles
16 Articles
Airlines fight headwinds: Southwest could cut more jobs, American reports double-digit profit decline
Rising fuel costs and geopolitical uncertainty are creating challenges for North Texas' hometown airlines. Southwest says additional layoffs remain on the table, while American's quarterly profit fell 88% despite record revenue. Read on to find out more.
Airlines revise 2026 outlooks as jet fuel prices surge
American Airlines and Southwest Airlines have lowered their 2026 earnings expectations as another sharp increase in jet fuel prices adds fresh pressure to carriers heading into the second half of the year. The latest revisions show how quickly the fuel picture has changed again following the breakdown of a ceasefire with Iran and renewed shippnig disruptions across the Middle East. American now expects its full-year result to fall between an adj…
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