Southwest Airlines cuts 2026 profit forecast on higher fuel
Southwest Airlines reduced its profit forecast for 2026 as high fuel expenses put pressure on operations, overshadowing positive financial results from the third quarter. The carrier reported third-quarter results that surpassed Wall Street projections for earnings and revenue, driven by strong demand and higher ticket prices and fees. Even with record revenue performance and year-over-year margin expansion, surging oil costs and jet fuel expenses forced management to lower guidance. The company anticipates paying up to $4.55 a gallon for jet fuel during the fourth quarter.
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- ✓ Southwest Airlines lowered its annual profit forecast and 2026 profit guidance due to high fuel costs.
- ✓ Southwest Airlines beat Wall Street estimates for third-quarter earnings and revenue.
- ✓ Southwest anticipates paying as much as $4.55 a gallon for jet fuel in the fourth quarter.
- ✓ U.S. airfares rose an average of nearly 23% year on year in the seven months through September.
What changed
Southwest Airlines officially lowered its profit outlook for 2026 due to surging fuel bills.
Live updates
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Southwest Airlines Cuts 2026 Profit Forecast on Fuel
Southwest Airlines reduced its profit forecast for 2026 as high fuel expenses put pressure on operations, overshadowing positive financial results from the third quarter. The carrier reported third-quarter results that surpassed Wall Street projections for earnings and revenue, driven by strong demand and higher ticket prices and fees. Even with record revenue performance and year-over-year margin expansion, surging oil costs and jet fuel expenses forced management to lower guidance. The company anticipates paying up to $4.55 a gallon for jet fuel during the fourth quarter.
Why it matters
Rising oil and fuel bills are battering major U.S. carriers, forcing airlines to rely heavily on steep fare increases and business overhauls to offset costs. According to Labor Department data, U.S. airfares climbed an average of nearly 23% year on year in the seven months through September, significantly outpacing the 3.6% average increase in overall consumer prices. This economic pressure highlights the vulnerability of airline margins to volatile global energy markets.
What is confirmed
- Southwest Airlines lowered its annual profit forecast and 2026 profit guidance due to high fuel costs.
- Southwest Airlines beat Wall Street estimates for third-quarter earnings and revenue.
- Southwest anticipates paying as much as $4.55 a gallon for jet fuel in the fourth quarter.
- U.S. airfares rose an average of nearly 23% year on year in the seven months through September.
Still unconfirmed
- Oil costs are rebounding following the unraveling of an energy ceasefire.
What to watch next
- Fourth-quarter jet fuel price averages and actual per-gallon costs
- Further adjustments to airline fare pricing strategies across the industry
confidence 100%Sources used for this update (17)
- finance.yahoo.com — Yahoo Finance - Stock Market Live, Quotes, Business & Finance News
- www.cnn.com — Breaking News, Latest News and Videos | CNN
- www.investing.com — Investing.com - Stock Market Quotes & Financial News
- help.naver.com — Futures Flat As Oil Rebounds After Trump's "Energy Ceasefire" Unravels, Memory Stocks Slide | ZeroHedge
- CNBC — Southwest Airlines cuts 2026 profit forecast on higher fuel
- Bloomberg.com — Southwest Cuts Outlook After High Fuel Costs Batter US Airlines
- Reuters — Southwest tops quarterly profit estimates on higher fares, fees
- Yahoo Finance — Southwest: Q3 Earnings Snapshot
- WSJ — Southwest Cuts Earnings Outlook Amid Rising Fuel Costs
- Yahoo Finance — Southwest Airlines (LUV) Beats Q3 Earnings and Revenue Estimates
- Barron's — Southwest Airlines Beats Expectations But Slashes Profit Outlook on Rising Fuel Costs
- Yahoo Finance — Southwest (LUV) Q3 Earnings: How Key Metrics Compare to Wall Street Estimates
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