Southwest Airlines Cuts Earnings Guidance Due to Rising Fuel Costs
Southwest Airlines (LUV) has cut its full-year earnings per share guidance due to rising jet fuel costs, despite a strong second quarter with record revenue and expanded margins. CEO Bob Jordan acknowledged that while demand remains robust across all sectors and geographies, the airline is facing significant pressure from higher-than-expected fuel expenses. The company now expects adjusted EPS of $3.25 to $4.25 for 2026, down from a previous range of at least $4. CFO Tom Doxey attributed this change primarily to an estimated year-to-date fuel headwind of about $1.33 per share. Jet fuel averaged $3.92 per gallon in Q2 2026, increasing expenses by nearly $900 million compared to the same period last year. Despite these challenges, Southwest is leveraging strategic cost-saving measures such as shifting lower-cost Gulf Coast fuel to higher-priced West Coast markets. The airline also reported strong revenue growth and a successful product overhaul that has boosted customer loyalty and managed business travel.
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