Airline Revenue Jumps 13% to $7.25 Billion in First Quarter

Southwest Airlines reported that revenue in its first-quarter period rose nearly 13% to $7.25 billion, marking a significant turnaround from a loss in the same quarter last year despite ongoing cost pressures.

The airline swung to a profit in the first quarter of 2026, reporting earnings of 45 cents per share compared to a loss of 13 cents per share in the first quarter of 2025, according to verified financial reports.

Demand is really strong … Strong in every sector.

Bob Jordan, CEO of Southwest Airlines

Southwest Airlines has implemented several revenue-generating initiatives to offset rising expenses, including the introduction of checked bag fees and seat assignment fees, while ending its long-standing open seating policy in January 2026.

The company’s operating margin expanded meaningfully by 810 basis points to 4.6% in the first quarter, reflecting progress from its commercial and cost initiatives despite high fuel costs and macroeconomic uncertainty.

Southwest Airlines reported a record passenger revenue of $6.6 billion for the first quarter, representing a 13.4% year-over-year increase, while total operating revenue rose 12.8% to $7.2 billion.

The airline issued a cautious outlook for the second quarter of 2026, projecting adjusted profits between 35 cents and 65 cents per share, below the market estimate of 55 cents per share, citing concerns over higher fuel prices and revenue performance volatility.

Southwest expects its capacity to remain flat to up no more than 1% in the second quarter, while forecasting unit revenues to rise by 16.5% to as much as 18.5% compared to the same period last year.

The company has held off on updating its full-year 2026 forecast, stating that achieving its original earnings guidance of $4 per share for the year would require either lower fuel prices or stronger revenue performance to offset higher fuel expenses.

Southwest Airlines said it will provide updates to its financial guidance as appropriate, noting that airlines across the industry are either cutting full-year forecasts or holding off on further projections due to volatile jet fuel prices, which remain their largest expense after labor costs.

The airline is pulling back on capacity growth plans to manage costs, a strategy that can contribute to higher airfares when fewer seats are available for sale.

Despite the challenges, CEO Bob Jordan emphasized that customer demand remains robust across all travel sectors, supporting the airline’s recent revenue growth even as fares have increased.