SOUTHWEST AIRLINES (LUV) Company Report

Achieved record operating revenues of $7.4 B in Q4 and $28 B for FY 2025, with full-year EBIT of $574 M (above guidance) and Q4 EBIT of $386 M; CASM ex increased 0.8% yoy.
2026 outlook includes adjusted EPS of at least $4 (vs $0.93 in 2025), Q1 RASM growth of ≥ 9.5% and capacity up 1–2%, reflecting yield, load factor and new product contributions.
Executed a broad transformation—introduced bag fees, basic economy fares, loyalty enhancements, upgraded co-brand card, free Wi-Fi, new partnerships, assigned seating and extra legroom—surpassing the $370 M cost-reduction target.
Returned capital via $2.6 B of share buybacks (~14% of shares), maintained investment-grade rating, and retrofitted over 800 aircraft for premium seating.
Delivered industry-leading operation—#1 in on-time performance, completion factor, lowest extreme delays; Q4 capacity +5.8%, RASM –0.2% yoy.

Jan 29, 2026, 3:00 PM

Transcript

Southwest Airlines reports Q4 2025 earnings and 2026 guidance

LUV

Earnings

Guidance Update

Share Buyback

Q4 operating revenue was $7.4 billion and full-year revenue reached $28 billion, driving full-year EBIT of $574 million and Q4 EBIT of $386 million.
In 2025, Southwest executed major initiatives—bag fees, basic economy fares, loyalty program optimization, co-brand card enhancements, free Wi-Fi, new partnerships, Red Eye flying, reduced turn times, and discontinued fuel hedging—surpassing its $370 million cost-reduction target and repurchasing $2.6 billion of shares (14% of outstanding).
For 2026, the airline guides adjusted EPS of at least $4 (vs. $0.93 in 2025) and Q1 adjusted EPS of at least $0.45 (vs. a $0.13 loss in Q1 2025) ; Q1 RASM is expected to rise ≥ 9.5% YoY with 1–2% capacity growth on about seven fewer aircraft.
Cost and fleet outlook for 2026 includes CASM-ex up ~3.5% in Q1 (including extra-legroom seating impact), management headcount flat, 66 Boeing 737-8 deliveries, 60 retirements, net CapEx of $3–3.5 billion, and ending Q4 with $3.2 billion in cash at 2.4× gross leverage.

Jan 29, 2026, 3:00 PM

Transcript

Southwest Airlines reports Q4 2025 results and 2026 guidance

LUV

Earnings

Guidance Update

Share Buyback

Q4 operating revenue of $7.4 billion and FY 2025 revenue of $28 billion, delivering full-year EBIT of $574 million—beating prior guide of $500 million.
Launched assigned seating and extra-legroom seating, expected to drive upsell revenue; Q1 2026 RASM guidance of +9.5% YoY on yield, load factor, initiatives, and loyalty programs.
2026 guidance: adjusted EPS of at least $4.00 (versus $0.93 in 2025) and Q1 adjusted EPS of at least $0.45 (versus a $0.13 loss in Q1 2025).
Cost and capacity outlook: Q4 CASM-ex up 0.8% YoY; full-year 2026 CASM-ex expected to rise ~3.5%; Q1 capacity growth of 1–2% with ~7 fewer aircraft; 66 Boeing 737-8 deliveries and 60 retirements; net capex of $3.0–3.5 billion.
Strong balance sheet: $3.2 billion cash, gross leverage of 2.4×; 2025 share repurchases of $2.6 billion; issued $1.5 billion of unsecured bonds in November.

Jan 29, 2026, 3:00 PM

Transcript

Southwest Reports Q4 Earnings, Guides 2026 EPS

LUV

Earnings

Guidance Update

Southwest posted Q4 revenue of $7.44 billion and adjusted EPS of $0.58, beating EPS estimates despite revenue missing consensus by ~1%.
Management forecasts 2026 adjusted EPS of at least $4.00 (FactSet est. $3.22) and Q1 2026 adjusted EPS near $0.45 (analyst est. $0.30).
The airline launched assigned seating, seat-selection fees and other premium offerings, and expects RASM to grow by 9.5%+ in 2026, with strong early bookings.
Southwest earned the top spot in The Wall Street Journal’s Best U.S. Airlines of 2025, and investors will focus on the upcoming earnings call for further detail.

Jan 28, 2026, 11:35 PM

WSJ

Southwest Airlines reports Q4 and full-year 2025 results; guides 2026 EPS

LUV

Earnings

Guidance Update

Share Buyback

Southwest Airlines reported record full-year operating revenues of $28.1 billion, net income of $441 million ($0.79 EPS), and adjusted EBIT of $574 million for 2025.
The company returned $2.9 billion to shareholders in 2025 through $2.6 billion in share repurchases and $399 million in dividends, ending the year with $3.2 billion in cash and equivalents.
Southwest expects adjusted EPS of at least $4.00 in 2026 (over 300% growth vs. 2025) and $0.45 in Q1, with full-year ASMs forecast to rise 2–3%.
Major 2025 transformation initiatives included implementing bag fees, basic economy fares, assigned and extra-legroom seating, Rapid Rewards optimization, and free Wi-Fi, contributing to operational enhancements and a #1 WSJ airline ranking.
Operationally, Q4 passenger revenues reached $6.8 billion (up 7.6% YoY), with capacity growth of 5.8% for the quarter and 1.6% for the year.

Jan 28, 2026, 9:28 PM

Press Release

Southwest Airlines reports Q4 and full year 2025 results and 2026 guidance

LUV

Earnings

Guidance Update

Share Buyback

2025 net income of $441 million ($0.79 EPS) and adjusted net income of $512 million ($0.93 adjusted EPS); adjusted EBIT of $574 million
Record operating revenues of $7.4 billion in Q4 and $28.1 billion for full year 2025
Returned $2.9 billion to shareholders through dividends and share repurchases (completed $2.6 billion repurchases, ~14% of shares)
2026 adjusted EPS guidance of at least $4.00, representing over 300% growth versus 2025

Jan 28, 2026, 9:15 PM

8-K

Southwest Airlines receives JPMorgan double upgrade

LUV

Guidance Update

JPMorgan upgraded Southwest Airlines from Underweight to Overweight (“double upgrade”) and raised its price target to $60.
The note projects a 2026 EPS outlook of $5, well above the current consensus of about $2.98.
Shares jumped ~4% to $44.52, briefly hitting a 52-week high of $44.61 on January 9, 2026.
The upgrade underscores confidence in Southwest’s business-model overhaul—assigned seating, premium offerings, and changes to baggage and fare policies—as key drivers of revenue and margin improvement.

Jan 9, 2026, 3:14 PM

Barron's

Southwest Airlines partners with Turkish Airlines for transatlantic travel

LUV

New Projects/Investments

Southwest Airlines will partner with Turkish Airlines to launch one-ticket transatlantic journeys between the U.S. and Istanbul in early 2026.
The alliance connects 10 U.S. gateway airports served by Southwest to Turkish Airlines’ network of over 350 global destinations via Istanbul.
Tickets for these seamless itineraries will be sold next year through Turkish Airlines, travel agents, and travel websites.
Beginning January 27, 2026, Southwest will roll out a redesigned cabin experience and offer assigned and extra-legroom seating on its flights.

Dec 17, 2025, 4:00 PM

Press Release

Southwest Airlines plans airport lounge network expansion

LUV

New Projects/Investments

Southwest is shifting from its low-cost model by developing an airport lounge network, with approval for its first lounge at Honolulu’s Daniel K. Inouye International Airport.
The $20 million minimum improvement requirement over five years underscores Southwest’s financial commitment to the lounge project.
Targeted access will focus on premium Chase card members and high-tier Rapid Rewards flyers, aligning with competitors like Delta and United.
As part of its “premiumization” strategy, Southwest ended its ‘two bags fly free’ policy and began charging for checked bags in 2024.
The lounge initiative may drive stock growth opportunities by capturing the luxury travel segment.

Dec 10, 2025, 6:07 PM

CNBC

Southwest expands late summer 2026 schedule with new California and Hawaii routes

LUV

New Projects/Investments

Extended booking window through September 2026 with an all-time high of 139 scheduled departures per peak day in San Diego during August–September 2026
Launching once-daily San Diego–Santa Barbara service on August 4, 2026, and doubling daily roundtrips to Portland, Salt Lake City, and Seattle, effective August 4, 2026
Introducing two California–Hawaii routes: Ontario–Honolulu on June 4, 2026, and Burbank–Honolulu on August 4, 2026
Resuming Long Beach service to Portland and Seattle (six days per week) beginning August 4, 2026

Nov 25, 2025, 6:15 PM

Press Release