Southwest Airlines Posts Stronger Profit but Warns Summer Outlook Falls Short of Expectations

Southwest Airlines saw its second-quarter profit climb more than 9%, thanks to higher fares that helped offset a sharp rise in fuel costs. But the carrier’s forecast for the busy summer months came in below what Wall Street had hoped for, raising questions about how much longer rising ticket prices can sustain momentum.

The Dallas-based airline said it expects third-quarter adjusted earnings between 50 cents and 75 cents per share, well short of the 82 cents analysts were looking for. Even though revenue is projected to jump 17.5% to 19.5% compared with a year ago, Southwest plans to keep capacity flat or shrink it by up to 1% versus the third quarter of 2025. The cautious outlook reflects mounting cost pressures, particularly at the fuel pump.

In the second quarter, revenue rose 16.4% to $8.4 billion, and the average fare jumped nearly 21% to $225.61 from $186.65 a year earlier. But the airline’s fuel bill surged 67% to $2.22 billion, eating into those gains. Net income increased to $233 million, or 47 cents a share, from $213 million, or 39 cents a share, a year ago. Excluding one-time items, adjusted earnings came in at 94 cents per share—though comparisons with analyst estimates are tricky because of an adjustment tied to higher-than-expected redemptions of flight credits. Southwest recently began putting expiration dates on credits for many tickets sold starting in mid-2025, a policy shift that affected the numbers.