Southwest Airlines has reduced its full-year 2026 profit forecast, citing higher fuel prices, to become the third major U.S. carrier to trim its outlook this month. CEO Bob Jordan stated that despite the cost pressures and increased fares, traveler booking behavior remains strong.
The company now projects adjusted earnings per share between $2.60 and $2.85 for the current year. This marks a significant reduction from the July forecast, which anticipated earnings between $3.25 and as much as $4.25 per share.
For the fourth quarter, Southwest expects adjusted earnings per share to range from 55 cents to 80 cents. The airline also forecast unit revenue, a metric for airfares, to increase by as much as 21% compared to the same period last year. Capacity is projected to grow by up to 4% on a year-over-year basis.
In an earnings release, Jordan noted that demand remained strong as the company overtook last year's introduction of bag fees and other commercial changes. He argued that these factors reinforce the durability of the airline's earnings power, even in the face of significantly elevated fuel costs.
Southwest reported that its average passenger fare in the third quarter was $231.69, an increase of nearly 27% from the same quarter in 2025. A company spokesman clarified that this figure does not include add-on fees.
The airline's financial results for the third quarter showed a net income of $270 million, or 55 cents per share, up from $54 million, or 10 cents per share, a year earlier. Revenue climbed more than 21% to reach $8.42 billion. After adjusting for one-time items, Southwest reported earnings of 66 cents per share.
These results come as Southwest continues to reshape its business model, having previously eliminated policies such as two free checked bags and open seating. The carrier now charges for many seat assignments and imposes bag fees, aligning its practices with major competitors.
Delta Air Lines and United Airlines also lowered their profit outlooks for the remainder of the year when they released their third-quarter earnings. Both airlines reported missing expectations for both revenue and profit in the third quarter.