Southwest Airlines Cuts Profit Outlook Amid Rising Fuel Costs
Southwest Airlines (LUV) has cut its full-year adjusted earnings per share guidance for 2026 to a range of $3.25 to $4.25, down from at least $4 previously. The adjustment is primarily due to rising jet fuel costs, which have increased by nearly $900 million compared to the same period last year and are expected to create an estimated headwind of about $1.33 per share for 2026. Despite these challenges, CEO Bob Jordan emphasized that demand remains strong across all sectors and geographies, with adjusted unit revenue hitting a record high in Q2 2026. The airline also reported significant growth in managed business travel and loyalty program membership. CFO Tom Doxey highlighted efforts to mitigate fuel costs by strategically sourcing lower-priced Gulf Coast fuel during the quarter. Fuel remains one of Southwest’s largest expenses, second only to labor, and its volatility continues to impact profitability. While ticket prices have not kept pace with rising fuel costs, strong revenue growth is helping offset some of these pressures.
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