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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 expects 2026 profits to at least quadruple, far exceeding analysts' expectations, as the carrier overhauls its half-century-old business model to include new moneymakers like bag fees 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, which could almost double last year's capacity expansion.
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"We wanted to give a little more time before we gave the upper bound of this forecast just to let a little more information come in" about the new initiatives, CFO Tom Doxey said in an interview Wednesday. He said travel demand has been strong. Southwest shares surged nearly 19%, their biggest percentage gain in a day since 1978, and closed at $48.50, the highest since November 2021. 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 at least 45 cents for the first quarter, above the 33 cents Wall Street projected. The forecast includes the impact of this week's winter storm, which CEO Bob Jordan told CNBC's Phil LeBeau on Thursday will amount to a hit of about $30 million to $40 million.
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