Southwest Airlines (LUV) Research

Forward Estimates

EPS Estimates

Current Qtr

$0.47

$0.29$0.99

vs $0.43+9.0%

20 analysts

Next Qtr

$0.56

$0.25$0.95

vs $0.11+408.1%

19 analysts

Current Yr

$2.70

$1.47$4.04

vs $0.93+190.1%

23 analysts

Next Yr

$4.53

$3.30$6.10

vs $2.70+67.9%

22 analysts

Revenue Estimates

Current Qtr

$8.56B

$8.48B$8.61B

vs $7.24B+18.2%

17 analysts

Next Qtr

$8.24B

$8.07B$8.41B

vs $6.95B+18.5%

16 analysts

Current Yr

$32.71B

$32.17B$33.18B

vs $28.06B+16.6%

21 analysts

Next Yr

$33.70B

$31.79B$34.75B

vs $32.71B+3.0%

21 analysts

SEC filings →

View all 10-K, 10-Q, and 8-K filings for LUV on EDGAR.

LUV filing events and research context
Filed	Item	Context
Feb 5, 2026	business	Southwest Airlines operates a major passenger network using a standardized fleet of 803 Boeing 737 aircraft. The company is transitioning from a pure point-to-point model toward a core-station approach with an increased emphasis on longer-haul routes and 24-hour redeye operations. To drive revenue and market share, Southwest is implementing significant structural changes, including the introduction of assigned seating, extra legroom options, and a tiered fare structure—comprising Basic, Choice, Choice Preferred, and Choice Extra bundles—that now includes bag fees. Distribution has expanded to include online travel agencies such as Expedia and Priceline. Labor remains the primary operating expense at 46.9%, while fuel is the second largest; notably, the company terminated its fuel hedging program in 2025. Fleet modernization focuses on Boeing 737 MAX aircraft, though growth is subject to FAA certification of the -7 model and Boeing delivery schedules. Key risks include inflationary labor pressures, volatile energy prices, and regulatory compliance regarding GHG emissions and PFAS. Additionally, the company launched "Getaways by Southwest" to capture higher-margin leisure vacation revenue and established international interline partnerships with carriers like Icelandair and Turkish Airlines to expand global connectivity.
Feb 5, 2026	mda	LUV achieved record 2025 operating revenues of $28.1 billion, with GAAP operating income rising 33.3% to $428 million. This growth was driven by transformational revenue initiatives, specifically the implementation of bag fees in May 2025 and a 6.7% increase in average passenger fares to $190.41. These gains were supported by lower jet fuel prices, averaging $2.41 per gallon, and a 15% reduction in corporate workforce, though partially offset by rising salaries and benefits. Net income decreased 5.2% to $441 million, primarily due to lower interest income from reduced cash balances. The company is pivoting its business model toward assigned and extra legroom seating, operational as of January 2026, and new fare products including Basic and Choice tiers. Distribution is expanding through Expedia and Priceline partnerships, and the company launched "Getaways by Southwest" packaged vacations. A critical operational risk remains Boeing’s delivery delays, which complicate fleet modernization and capacity planning. LUV returned $2.9 billion to shareholders via dividends and share repurchases, ending the year with $4.7 billion in total available liquidity and a target leverage range of 1.0 to 2.5 times adjusted debt to adjusted EBITDAR.
Feb 5, 2026	risk_factors	LUV is highly exposed to jet fuel price volatility, which accounted for 19% of 2025 operating expenses, a risk magnified by the termination of its fuel hedging program in Q2 2025. The company maintains a critical dependency on Boeing as its sole aircraft manufacturer, specifically regarding the delivery and FAA certification of the MAX -7. Labor costs remain a primary pressure point, with 84% of the workforce unionized and facing inflationary wage increases. To maintain competitiveness against unbundled and premium fare products, LUV is implementing transformational shifts, including assigned seating, bag fees, and extra legroom options. Operational stability is tied to core stations like Denver and Chicago-Midway, while growth is constrained by FAA air traffic control inefficiencies and airport capacity. LUV is expanding its international footprint through interline partnerships with carriers such as Icelandair and Turkish Airlines. Environmental risks center on the cost and availability of Sustainable Aviation Fuel (SAF) and stringent GHG emission mandates. Additionally, the company faces risks from activist shareholders and the operational complexities of integrating AI and machine learning. Cybersecurity threats to critical IT infrastructure and the potential for systemic failures during extreme weather events further threaten financial results.

Filed

Item

Context

Feb 5, 2026

business

Southwest Airlines operates a major passenger network using a standardized fleet of 803 Boeing 737 aircraft. The company is transitioning from a pure point-to-point model toward a core-station approach with an increased emphasis on longer-haul routes and 24-hour redeye operations. To drive revenue and market share, Southwest is implementing significant structural changes, including the introduction of assigned seating, extra legroom options, and a tiered fare structure—comprising Basic, Choice, Choice Preferred, and Choice Extra bundles—that now includes bag fees. Distribution has expanded to include online travel agencies such as Expedia and Priceline. Labor remains the primary operating expense at 46.9%, while fuel is the second largest; notably, the company terminated its fuel hedging program in 2025. Fleet modernization focuses on Boeing 737 MAX aircraft, though growth is subject to FAA certification of the -7 model and Boeing delivery schedules. Key risks include inflationary labor pressures, volatile energy prices, and regulatory compliance regarding GHG emissions and PFAS. Additionally, the company launched "Getaways by Southwest" to capture higher-margin leisure vacation revenue and established international interline partnerships with carriers like Icelandair and Turkish Airlines to expand global connectivity.

Feb 5, 2026

mda

LUV achieved record 2025 operating revenues of $28.1 billion, with GAAP operating income rising 33.3% to $428 million. This growth was driven by transformational revenue initiatives, specifically the implementation of bag fees in May 2025 and a 6.7% increase in average passenger fares to $190.41. These gains were supported by lower jet fuel prices, averaging $2.41 per gallon, and a 15% reduction in corporate workforce, though partially offset by rising salaries and benefits. Net income decreased 5.2% to $441 million, primarily due to lower interest income from reduced cash balances. The company is pivoting its business model toward assigned and extra legroom seating, operational as of January 2026, and new fare products including Basic and Choice tiers. Distribution is expanding through Expedia and Priceline partnerships, and the company launched "Getaways by Southwest" packaged vacations. A critical operational risk remains Boeing’s delivery delays, which complicate fleet modernization and capacity planning. LUV returned $2.9 billion to shareholders via dividends and share repurchases, ending the year with $4.7 billion in total available liquidity and a target leverage range of 1.0 to 2.5 times adjusted debt to adjusted EBITDAR.

Feb 5, 2026

risk_factors

LUV is highly exposed to jet fuel price volatility, which accounted for 19% of 2025 operating expenses, a risk magnified by the termination of its fuel hedging program in Q2 2025. The company maintains a critical dependency on Boeing as its sole aircraft manufacturer, specifically regarding the delivery and FAA certification of the MAX -7. Labor costs remain a primary pressure point, with 84% of the workforce unionized and facing inflationary wage increases. To maintain competitiveness against unbundled and premium fare products, LUV is implementing transformational shifts, including assigned seating, bag fees, and extra legroom options. Operational stability is tied to core stations like Denver and Chicago-Midway, while growth is constrained by FAA air traffic control inefficiencies and airport capacity. LUV is expanding its international footprint through interline partnerships with carriers such as Icelandair and Turkish Airlines. Environmental risks center on the cost and availability of Sustainable Aviation Fuel (SAF) and stringent GHG emission mandates. Additionally, the company faces risks from activist shareholders and the operational complexities of integrating AI and machine learning. Cybersecurity threats to critical IT infrastructure and the potential for systemic failures during extreme weather events further threaten financial results.

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LUV filing events and research context

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