Southwest Airlines Q1 2026 earnings: profit, fuel cost warning

Southwest Airlines reported a first-quarter nett of $227 million, oregon $0.45 per diluted share. A $149 cardinal nonaccomplishment successful the year-ago play gave mode to a $227 cardinal first-quarter profit, with net coming successful astatine $0.45 per diluted stock compared with a nonaccomplishment of $0.26 per stock 12 months prior. Operating gross roseate 12.8% to $7.25 billion, a first-quarter grounds for the Dallas-based carrier.

Passenger gross climbed 13.4% year-over-year to $6.6 billion. The operating borderline improved 8.1 percent points to 4.6%, the institution said. About 60% of customers upgraded from the basal merchandise during the quarter, up from astir 20% successful 2025.

The Q2 adjusted net outlook Southwest enactment guardant — a scope of $0.35 to $0.65 per stock — fell abbreviated of the $0.55 statement estimation among analysts surveyed by LSEG, according to CNBC. Issued successful January, the full-year adjusted net people of $4.00 per stock was near unchanged, though Southwest cautioned that hitting that fig hinges connected a operation of easing substance costs and continued outperformance connected the gross side.

Fuel costs are the cardinal unit point. Southwest paid $2.73 per gallon successful the archetypal quarter, supra its anterior guidance of astir $2.40 — a $164 cardinal summation that represented astir a $0.22 headwind to net per share. For the 2nd quarter, the institution projected substance costs of $4.10 to $4.15 per gallon based connected the guardant curve arsenic of April 16.

CEO Bob Jordan, speaking with reporters aft the net release, struck an upbeat code connected bookings. "Demand is truly beardown ... beardown successful each sector," helium said.

Second-quarter capableness is expected to beryllium level to up 1%, with portion revenues forecast to emergence betwixt 16.5% and 18.5% year-over-year.

Southwest ended the 4th with $3.3 cardinal successful currency and generated $1.4 cardinal successful operating currency flow, a 65% summation from the archetypal 4th of 2025. The institution repurchased $1.25 cardinal successful shares and paid $93 cardinal successful dividends during the quarter.

The results bespeak a broader acceptable of commercialized changes Southwest has made implicit the past 2 years. The hose ended its unfastened seating argumentation — a diagnostic it had offered for much than 50 years — connected Jan. 27, 2026, introducing assigned seating and other legroom options crossed 4 fare bundles. The alteration came aft Southwest besides ended its cosmopolitan 2 escaped checked bags policy, restricting it to higher-paying customers.

Southwest overhauled its boarding process alongside the seating shift, moving from unfastened boarding groups to 8 structured groups that prioritize premium and predominant flyers. The bearer besides launched work successful St. Thomas, U.S. Virgin Islands, and Knoxville, Tennessee successful the quarter, and entered a concern with All Nippon Airways, expanding its planetary web to 7 partners.

Looking ahead, Southwest said it plans to deploy Starlink Wi-Fi crossed its fleet, with astatine slightest 300 craft expected to beryllium equipped by the extremity of 2026. The institution besides announced it volition suspend operations astatine Chicago O'Hare and Washington Dulles successful June, reallocating capableness to higher-performing markets.