Southwest Airlines Reports Record Revenue Following Collapse Of Spirit Airlines

Southwest Airlines reported record Q2 2026 operating revenue of $8.4 billion, up 16.4 percent year over year and the highest quarterly revenue in company history, and adjusted EPS of $0.94, nearly double the $0.51 Wall Street consensus.

Net income rose 9.4 percent to $233 million. The strong results came despite a nearly $900 million surge in fuel costs as jet fuel prices climbed to $3.92 per gallon from $2.32 a year earlier, driven by the Iran conflict's impact on oil markets.

The commercial transformation Southwest has been executing is producing results. The airline ended its signature open-seating policy in January and introduced assigned seating and extra legroom options. Managed business revenue jumped 30 percent.

Rapid Rewards loyalty enrollments rose 35 percent. Chase co-branded card acquisitions climbed 28 percent.

The disappointment came in the forward guidance. Southwest guided Q3 adjusted EPS of $0.50 to $0.75, well below the $0.82 analyst consensus, a miss the company attributed to capacity adjustments, fuel cost volatility and the headwind of lapping last year's bag fee introduction.

Full-year 2026 adjusted EPS guidance was trimmed to $3.25 to $4.25 from a prior floor of at least $4.00. The stock dipped after hours despite the Q2 beat.