Southwest Airlines Co. operates as a passenger airline company that provides scheduled air transportation services in the United States and internationally. It also provides Rapid Rewards loyalty program; SWABIZ, an online booking tool; and inflight entertainment platform that includes movies-on-demand live and on-demand television, flight tracker, and additional curated content, as well as a variety of premium snacks and coffee. In addition, the company offers ancillary services, such as in-flight purchases, baggage fees, EarlyBird Check-In, and upgraded boarding, as well as transportation of pets and unaccompanied minors. As of December 31, 2025, the company operated a total fleet of 803 Boeing 737 aircraft; and served 117 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. Southwest Airlines Co. was incorporated in 1967 and is headquartered in Dallas, Texas.
Southwest Airlines reported second quarter 2026 adjusted earnings of $0.94 per share, exceeding estimates and supported by strong passenger revenues and record managed business revenue. The company also issued guidance for the third quarter and full year 2026 pointing to continued adjusted earnings and revenue growth alongside cost discipline. Despite the solid Q2 report, Southwest Airlines shares have been under pressure recently, with a 30-day share price return of down 15.27% and a year-to-date share price return of down 2.23%, while the 1-year total shareholder return of 25.54% and 3-year total shareholder return of 38.03% indicate longer-term holders have still seen gains. The most followed narrative for Southwest Airlines points to a fair value of $51.79 compared with the latest close at $40.38, implying a 22% undervaluation based on its own assumptions. Planned introduction of premium and assigned seating, along with basic economy offerings, can enhance revenue yield through differentiated pricing strategies, potentially boosting net margins and overall earnings.
FAA certifies Boeing 737 MAX 7 after years of delays
The FAA certified Boeing's 737 MAX 7 on Monday, the smallest version of its bestselling jet, nearly a decade after the company first expected approval. Boeing shares jumped as much as 8% on the news, part of a broader rally that also included an analyst upgrade and falling oil prices. The approval unlocks real cash for Boeing, since manufacturers collect most of a plane's price on delivery, and Boeing already has roughly 30 to 40 MAX 7s and MAX 10s built and waiting. However, launch customer Southwest Airlines still won't fly the MAX 7 this year because its own planes need extra-legroom seat upgrades, and the airline says revenue service won't start until 2027. Jefferies noted Boeing already has 282 orders for the MAX 7, and the FAA is expected to clear the larger MAX 10 right behind it.
Airlines scramble for jet fuel as Strait of Hormuz closure drags on
The months-long closure of the Strait of Hormuz has triggered severe global jet fuel shortages, forcing airlines to cut flights and seek alternative supplies. Europe faces a jet fuel supply deficit of almost 600,000 barrels per day in the third quarter, according to consultancy Energy Aspects, compared with surpluses of around 116,000 barrels per day in the United States and 425,000 barrels per day in Asia-Pacific. Jet fuel prices spiked to a high of $215.32 a barrel in late March before easing to just over $130. Ryanair reported an 11% rise in operating costs after 20% of its unhedged fuel was hit by price spikes, while Southwest Airlines shipped 12.6 million gallons of fuel from Texas to California via the Panama Canal to ease West Coast shortages. United Airlines expects nearly $6 billion in additional fuel expense for full-year 2026 compared with its forecast at the start of the year.
Global commercial flights hit single-day record of 153,359 on July 23
Global commercial flights reached a new single-day record of 153,359 on July 23, according to tracking data, underscoring robust demand that has lifted major U.S. airline stocks. Delta Air Lines, United Airlines Holdings, and Southwest Airlines all reported strong second-quarter results in July, with Delta beating revenue and earnings expectations and projecting full-year 2026 income of about $73 billion, 15% above 2025 levels. United raised its full-year earnings forecast to $9 to $11 per share, while Southwest posted earnings of $0.94 a share on revenue of $8.72 billion, exceeding analyst estimates. Despite the positive performance, rising jet fuel costs remain a risk, with United warning that higher fuel prices could add up to $6 billion to its expenses this year and Southwest noting it has raised fares in response. Jet fuel typically accounts for 20% to 30% of an airline's operating expenses, and further spikes tied to Persian Gulf tensions could pose headwinds.
FAA certifies Boeing 737 MAX 7 after years of review
The Federal Aviation Administration has certified the Boeing 737 MAX 7, the smallest member of the MAX family, marking the first new aircraft certification for Boeing since the MAX crashes. The approval follows a lengthy regulatory review and clears a path for deliveries to Southwest Airlines, a key customer for the MAX 7. The decision directly affects Boeing's commercial aircraft business, which depends on narrowbody jets as a core revenue source. With deliveries to Southwest now possible, investors can focus more on execution risks around production quality, delivery timelines, and customer support. The certification arrives shortly after Boeing's second quarter 2026 results, where revenue was US$24,560 million and the company reported a loss of US$444 million.
Southwest Airlines unveils Business Priority and NDC connectivity for corporate travel
Southwest Airlines announced new benefits for its Southwest Business program, including a Business Priority product and New Distribution Capability connectivity. The Business Priority option, available in early 2027 for qualified corporate travel agreements, will offer preferred reaccommodation, standby, and boarding benefits. Southwest is also introducing NDC capabilities, with an evolved in-house API expected by the end of 2026 and Amadeus Altéa NDC connectivity anticipated later in 2027. These moves aim to give corporate buyers greater flexibility and access to Southwest's fare products and seating ancillaries through third-party booking tools.
U.S. Airlines Slash Earnings Outlooks as Jet Fuel Costs Soar on Middle East Conflict
U.S. airlines are slashing earnings forecasts after renewed Middle East hostilities pushed jet fuel costs sharply higher. Southwest Airlines reported a $900 million year-over-year jump in second-quarter fuel expenses, a $1.17 headwind to adjusted earnings per share, and cut its full-year 2026 adjusted EPS guidance to a range of $3.25 to $4.25 from at least $4.00. American Airlines saw fuel expense surge over $2.2 billion, or 83%, and now expects full-year adjusted diluted EPS between a loss of $0.65 and earnings of $0.65, with a third-quarter loss of $0.10 to $0.70 per share. United Airlines anticipates nearly $6 billion in added fuel expense for full-year 2026 and reported a $2.3 billion, or 84%, jump in second-quarter fuel costs. The spike follows the collapse of a U.S.-Iran memorandum of understanding and a ceasefire, which reignited crude and fuel price rallies, while record U.S. fuel exports and tight global markets add further pressure.
Southwest Airlines cuts full-year profit guidance on rising fuel costs
Southwest Airlines has slashed its full-year 2026 adjusted earnings per share guidance to a range of $3.25 to $4.25, down from a prior forecast of at least $4, as rising jet fuel prices weigh on profitability. CEO Bob Jordan said the airline faces an estimated year-to-date fuel headwind of about $1.33 per share, with jet fuel averaging $3.92 per gallon in the second quarter and pushing fuel expense up by nearly $900 million compared to the same period last year. Despite the pressure, Jordan noted that earnings remain broadly in line with original expectations, while record second-quarter adjusted unit revenue growth of 20.1% and a 30% jump in managed business revenue underscore strong demand. The carrier also reported liquidity of $5.3 billion and nearly $2 billion in operating cash flow for the first half of the year.
CSX and Knight-Swift Beat Estimates as Freight Cycle Turns, Southwest Misses on Fuel Costs
Three transportation companies reported earnings this week, revealing diverging fortunes as fuel costs surged after the Iran war began. Railroad firm CSX Corporation beat expectations with revenue rising 10% to $3.94 billion and profit of $1 billion, or 54 cents a share, driven by strong intermodal shipments, while raising its full-year outlook. Trucking company Knight-Swift Transportation Holdings saw adjusted earnings jump 80% to 63 cents per share on revenue of $2.1 billion, as a tightening truck market pushed up prices and its intermodal business neared breakeven. In contrast, Southwest Airlines posted adjusted earnings of 94 cents per share, nearly double estimates, but revenue of $8.43 billion missed expectations and a one-time accounting change inflated results; its fuel bill soared 67% to $2.22 billion, forcing it to lower full-year profit guidance to a range of $3.25 to $4.25 per share. Hedge fund data showed Knight-Swift held by 53 funds with an average portfolio weight of 19.6%, signaling strong institutional confidence ahead of the results.
Air Premia and Klarna Partnerships Expand Southwest Airlines' Reach and Payment Options
Southwest Airlines has entered an interline partnership with Air Premia and a long-term payment collaboration with Klarna Group plc, extending its network to over 120 U.S. destinations for Korean travelers and offering U.S. customers flexible payment options including installments and financing. The Air Premia deal opens East Asian access to Southwest's domestic network, while the Klarna agreement broadens the airline's payment ecosystem. These moves are part of Southwest's strategy to reach more customers through more channels, alongside expanded Expedia distribution, though they do not materially alter near-term reliance on fare product rollouts and cost control. The company's narrative projects $34.5 billion in revenue and $2.3 billion in earnings by 2029, requiring 6.1% annual revenue growth and a $1.5 billion earnings increase from $817.0 million.
Boeing Nears FAA Approval for 737 Max 7 and Max 10 Engine Fix
Boeing is nearing FAA approval for a redesigned engine anti-ice system that could finally clear the 737 Max 7 and Max 10 for commercial service. The fix is in the final stages of certification, according to Reuters. Boeing has already built about 30 Max 7 jets and 9 Max 10s awaiting delivery, while the Max 10 has completed roughly 98% of its certification flight-testing program. The Max 10 represents more than 25% of Boeing's remaining 737 Max backlog, and approval could unlock years-delayed deliveries and support cash flow. Southwest Airlines is the largest Max 7 customer.
Jim Cramer Says Southwest Airlines Has Become More Disciplined
Jim Cramer said on Mad Money that Southwest Airlines has become more disciplined and is a terrific turnaround story. He noted that the low-cost carrier has been operating much more efficiently since activist Elliott Investment Management got involved in the summer of 2024. Southwest's stock has fallen about 25% in less than two months and is trading at less than 15 times this year's earnings estimates, even though earnings are expected to more than triple. Cramer pointed out that earnings estimates have already come down from over $4 per share to $2.86 per share, which is still more than three times last year's earnings. He also speculated that if big airlines are eager to consolidate, they might want to own Southwest.
Southwest Airlines Stock May Trade At A Premium To Fair Value
Southwest Airlines stock may trade at a premium to fair value after a 50.2% return over the past year. The stock currently trades at a P/E of about 30.1 times, compared with an industry average of 10.1 times and a peer average of 23.2 times, and passes only 2 of 6 valuation checks on Simply Wall St's scorecard. Morgan Stanley's upgrade tied to assigned seating and new add-on services supports higher revenue assumptions, but the current P/E already reflects a fair amount of confidence in the earnings outlook. Simply Wall St's tailored fair P/E for Southwest Airlines is 28.4 times, suggesting investors are paying a modest premium. Community views are split, with a bull case seeing the stock as 16% undervalued and a bear case arguing it is 6% overvalued.
BofA sees Delta, United entering a rare airline sweet spot
Bank of America has raised price targets across the airline sector, citing steady demand, stronger fares, and reduced fuel costs that may support greater profitability into second-quarter results. The brokerage lifted its target for Delta Air Lines to $100 from $93 and for United Airlines Holdings to $150 from $145, while also boosting objectives on American Airlines, Southwest, Alaska Air, JetBlue, Frontier, and Allegiant. BofA now expects Delta's second-quarter unit revenue growth of 13.4% and third-quarter unit sales growth of 14.7%, with adjusted diluted EPS for 2026 estimated at $6.50, the low end of Delta's guidance range. For United, the firm projects second-quarter unit revenue growth of 13.5% and third-quarter growth of 15.6%, raising its 2026 EPS forecast to $11.15. The call is supported by airfare data showing a 26.7% year-over-year surge in May and a 15% increase in travel agency ticket sales, while jet fuel prices have declined roughly 35% from early April highs. However, BofA warns that domestic capacity is expected to rise 3.9% in October and 6.9% in November, which could erode unit-revenue gains if airlines do not remain disciplined.
Goldman, TD Cowen Raise Price Targets on Major U.S. Airlines
Goldman Sachs and TD Cowen raised price targets on several major U.S. airlines, citing stronger revenue trends and a 21% drop in fuel costs over the past month. Goldman lifted its targets on Delta to $116, United to $162, Alaska to $69, American to $15, and JetBlue to $4.50, while TD Cowen raised its targets on American to $24 and Southwest to $53. The two firms diverge on American Airlines, with Goldman maintaining a Sell rating at a $15 target below the current price around $18, and TD Cowen keeping a Buy rating with a $24 target. Delta and United reported strong first-quarter results, with Delta posting adjusted earnings per share of $0.64 on revenue of $14.2 billion and United guiding full-year 2026 earnings per share to between $7 and $11. The U.S. Global Jets ETF, which bundles these carriers, is up 18% year to date.
Goldman Sachs raised its outlook on the airline industry, lifting its third-quarter and fourth-quarter 2026 net income forecast by 24% and 32% respectively, citing strong demand and a better competitive environment after Spirit ceased service in May. Analyst Catherine O’Brien raised price targets for several carriers, including Allegiant by 14% to $142, Alaska Air by 19% to $69, American Airlines by 50% to $15, Delta by 45% to $116, JetBlue by 28% to $4.50, Southwest by 17%, and United by 24% to $162. However, O’Brien downgraded SkyWest to Neutral from Buy and cut its price target by 14% to $108, warning that lower-than-expected industry capacity growth increases downside risk to SkyWest’s block hour production. She lowered her 2026 block hour growth forecast for SkyWest to 3.0% from 3.5% previously, and from 4.9% earlier this year, calling it a significant deceleration from recent years.
Southwest Airlines is set to report fiscal second-quarter 2026 earnings, with analysts expecting a profit of $0.50 per share, up 16.3% from $0.43 per share in the same quarter last year. The company has beaten or met earnings estimates in three of the past four quarters. For the full fiscal year ending in December, analysts forecast earnings of $2.93 per share, a 215.1% jump from $0.93 per share in fiscal 2025. Southwest shares have surged 58.5% over the past 52 weeks, far outpacing the S&P 500's 20.9% gain and the State Street Industrial Select Sector SPDR ETF's 25.6% return. Wall Street holds a Moderate Buy consensus on the stock, with 10 of 24 analysts rating it a Strong Buy and a Street-high price target of $65 implying 26.4% upside from current levels.
Air Fares May Not Fall Until September Despite Lower Oil Prices After Trump’s Iran Deal
Airline fares are unlikely to drop significantly until fall despite a decline in oil prices following the Iran agreement, according to GasBuddy analyst Patrick De Haan. De Haan said airlines optimized capacity for high fuel prices and summer demand, so only a few deals on less utilized routes are expected, with a full drop in fares not coming until demand falls in mid-to-late August and more so in the fall when capacity exceeds demand. He noted that some international flights have already seen price drops, with fares from Chicago to Italy falling from over $1,200 to under $800. Analysts have also pointed to strong demand and the recent collapse of Spirit Aviation Holdings as factors keeping ticket prices elevated, while shipping costs have surged due to uncertainty around the Strait of Hormuz. Oil prices fell on Thursday, with West Texas Intermediate crude below $70 at $69.87 per barrel and Brent crude at $72.98 per barrel, while jet fuel cost $2.83 per gallon and the national average for gas was $3.918 per gallon.
Southwest flies first aircraft equipped with Starlink inflight Wi-Fi
Southwest Airlines flew its first aircraft equipped with Starlink inflight Wi-Fi connectivity on June 22 on a flight between Dallas and Albuquerque. Chief Customer and Brand Officer Tony Roach said the ultra-fast Wi-Fi brings an at-home experience to the air. Southwest announced a partnership with Starlink in February to rapidly integrate the service into its fleet, with plans to make it available on 300 aircraft by the end of 2026. The carrier more recently said it will use a mix of low-Earth-orbit providers for its remaining fleet, suggesting it could tap Amazon, Viasat, and other smaller names. Shares of Gogo, a broadband provider to the aviation industry, have lost more than 80% of their value since the beginning of the year and fell another 2% on Thursday to a five-year low amid the proliferation of Starlink Wi-Fi across domestic carriers.
Jet Fuel Prices Are Crashing, and These Airline Stocks Could Benefit Most
UBS said U.S. airline stocks are likely to shift back toward company-specific fundamentals after a macro-driven rally, as jet fuel prices fell 13% over three sessions and are about 40% below April peaks. The bank flagged a valuation gap between Delta Air Lines and United Airlines, noting Delta trades at more than twice United's 2027 earnings multiple, and said that spread could narrow if United's valuation improves while lower fuel prices support earnings. For more direct fuel exposure, UBS pointed to Alaska Air Group and American Airlines Group, estimating that a 10-cent drop in fuel prices would lift 2027 earnings per share by 13% for Alaska and 16% for American, versus smaller gains for Delta, United and Southwest Airlines. UBS kept Buy ratings on Delta, United, American and Alaska, while warning that higher valuations will likely require revenue strength, not just cheaper fuel.
PR Newswire Highlights 13 Major Press Releases From the Week
PR Newswire released its weekly roundup of notable press releases for June 15-19, 2026, featuring 13 stories spanning media, education, retail, aviation, technology, food, healthcare, consumer goods, pharmaceuticals, defense, lifestyle, and transportation. Fox Corporation announced a deal to acquire Roku for $160.00 per share in a cash-and-stock transaction valuing Roku at approximately $22 billion in enterprise value. U.S. News unveiled its 2026-2027 Best Global Universities Rankings, while Urban Outfitters debuted its second annual Pride vinyl collection with 12 limited-edition releases from artists including Reneé Rapp and Kesha. United Airlines introduced a custom “Stars and Stripes” livery on Boeing 787-10 and 737-800 aircraft and marked a military pilot hiring milestone. SandboxAQ signed a definitive agreement with the U.S. Department of Commerce for a $500 million CHIPS R&D award to develop novel molecules and formulations for semiconductor manufacturing. McDonald’s announced the limited-time return of its Fried Apple Pie starting June 23. LifeNet Health, NASA, and UNOS completed a first-of-its-kind drone kidney transport study with preliminary findings showing no negative effects on the organs. Crayola introduced an ‘All Grown Up’ adult coloring line with alcohol-based markers, acrylic paint markers, and artist-designed coloring books. Lilly acquired 4E Therapeutics to advance a non-opioid approach to chronic pain. Lockheed Martin and GM Defense are collaborating to strengthen the U.S. manufacturing and defense industrial base. Wildlife conservationist Robert Irwin became the new face of The Lad Collective bedding brand. Southwest Airlines partnered with Amazon Web Services to accelerate AI capabilities and transition to a cloud-based architecture by 2028. Life360 and Uber partnered to help parents coordinate rides for teens.
Trump Administration Clears Delta in CrowdStrike Outage Probe
The Trump administration has closed a federal investigation into Delta Air Lines' handling of the CrowdStrike-related outage without taking enforcement action. The U.S. Department of Transportation said on Monday it had concluded its review of Delta's response to the July 2024 technology meltdown, sparing the carrier from penalties despite disruptions that affected more than 1.3 million travelers and cost the company an estimated $500 million. The investigation was launched under the Biden administration after Delta took significantly longer than other major U.S. carriers to recover from the global software outage triggered by cybersecurity firm CrowdStrike. The review found that Delta provided prompt refunds, baggage assistance, and appropriate support for passengers with disabilities during the crisis. The decision was made in November but disclosed publicly on Monday, as the Trump administration has scaled back several aviation consumer-protection actions initiated during Biden's tenure, including waiving an $11 million penalty against Southwest Airlines and $16.7 million in penalties against American Airlines.
Southwest Airlines partners with AWS to become a fully cloud-based, AI-enabled airline by 2028
Southwest Airlines is partnering with Amazon Web Services to modernize its technology architecture and become a fully cloud-based, AI-enabled airline by 2028. The carrier will move away from a largely on-premises environment, adopting tools such as AWS Kiro, an AI-powered integrated development environment, and Quick, an AI assistant and agentic workspace, to shorten development cycles, automate testing, and streamline cloud infrastructure creation. The transition aims to provide greater speed, flexibility, and reliability across operations that support more than 70,000 employees and 134 million travelers. AWS Vice President of Agentic AI Swami Sivasubramanian said the collaboration will deliver real, measurable results at scale by deploying AI agents across customer experience, operations, and software development.