A Southwest Airlines aircraft parks at Gate B33 while its tail sticks into the sunlight at Boston Logan International Airport in Boston, MA, on December 22, 2025.
Austin DeSisto | Nurphoto | Getty Images
Southwest Airlines on Wednesday forecast a surge in 2026 profits well above analysts’ expectations as the carrier overhauls its half-century-old business model to include new moneymakers like bag and seat assignments.
The airline expects to earn at minimum, an adjusted $4 a share this year, exceeding the $3.19 analysts had anticipated, according to estimates from LSEG. It also forecast capacity growth of 2% to 3% compared with 2025.
In the first quarter, Southwest said it expects revenue per seat mile to rise 9.5%, above the 8.5% analysts expected. The carrier forecast adjusted earnings of 45 cents for the first quarter, above the 33 cents Wall Street projected.
Southwest stock rose nearly 7% in post-market trading after the company’s report.
Here’s how the company performed in fourth quarter compared with Wall Street expectations, according to consensus estimates from LSEG:
- Earnings per share: 58 cents adjusted vs. 58 cents cents expected
- Revenue: $7.44 billion vs. $7.51 billion expected
Southwest’s fourth-quarter net income rose almost 24% from a year earlier to $323 million, while revenue rose 7.4% to $7.44 billion. Adjusting for one-time items, Southwest posted earnings of $301 million or 58 cents a share.
“Notwithstanding the impact of Winter Storm Fern, 2026 is off to a strong start, driven by the Company’s Customer-focused product offering, operational excellence, and dramatic progress from the transformational initiatives implemented last year,” CEO Bob Jordan said in an earnings release.
Southwest has spent much of the past two years making drastic changes to its business model, including ending its open boarding policy and this week moving to assigned seats, which come with upcharges for certain spots, including its new extra legroom section.
Last year, the airline began charging customers to check bags for the first time ever and launched basic economy fares. The policies make the longtime industry standout more like its rivals as the airline faces pressure to improve profits.
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