Southwest Cuts 2026 Earnings Forecast as Fuel Costs Rise

Southwest Airlines lowered its 2026 adjusted earnings forecast after higher fuel costs pressured its outlook, cutting expected profit per share despite a sharp rise in third-quarter revenue.

The airline now expects adjusted earnings of $2.60 to $2.85 per share this year, down from the $3.25 to $4.25 range set in July. Southwest is the third major U.S. carrier to lower its 2026 forecast this month, after Delta Air Lines and United Airlines. The change follows Southwest’s July outlook and United’s revised 2026 forecast.

For the fourth quarter, Southwest projects adjusted earnings of 55 cents to 80 cents per share. It expects unit revenue to increase by as much as 21% from a year earlier and capacity to grow by up to 4%.

Southwest posted third-quarter revenue of $8.42 billion, up more than 21% year over year, and adjusted earnings of 66 cents per share. Net income rose to $270 million from $54 million a year earlier.

The average passenger fare reached $231.69, nearly 27% higher than in the same quarter last year. Revenue passengers declined 3.2% to 33.47 million. Southwest has also been changing its long-standing business model, including ending open seating and two free checked bags while adding paid seat assignments and a bag fee.

“Demand remained strong,” Southwest CEO Bob Jordan said. The company’s earnings call is scheduled for 10 a.m. ET Oct. 22 (14:00 UTC).