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Southwest Cuts 2026 Guidance to $2.60–$2.85 a Share on Fuel Costs
Why did Southwest Airlines cut its profit forecast?
Southwest Airlines (LUV) cut its 2026 profit guidance to $2.60–$2.85 a share on Wednesday as jet fuel costs rose, the third big US airline to cut its outlook this month.
Key numbers
| 2026 adjusted EPS guidance | $2.60–$2.85from $3.25–$4.25 |
|---|---|
| Q3 fuel cost per gallon | $3.92vs $3.70–$3.75 planned |
| Q4 assumed fuel cost per gallon | ~$4.55up from $3.92 in Q3 |
| Q3 revenue | $8.4B+21.2% YoY |
| Q3 adjusted EPS | $0.66beat estimates of ~$0.57–$0.58 |
| Q3 fuel expense increase | $821Mvs Q3 2025 |
What happened
Southwest Airlines (LUV) cut its 2026 profit guidance to $2.60–$2.85 a share on Wednesday as jet fuel costs rose, the third big US airline to cut its outlook this month. The old range, set in July, was $3.25 to $4.25 a share. Fuel cost $3.92 a gallon in the third quarter, above the $3.70–$3.75 the airline planned for, leaving its fuel bill $821 million higher than a year ago. Southwest still beat estimates, earning an adjusted 66 cents a share on record revenue of $8.4 billion. It expects fuel near $4.55 a gallon in the fourth quarter.
Why it matters
Southwest Airlines is the third big US airline this month to lower its 2026 profit outlook, which shows high fuel costs are squeezing the whole industry, not just one company. Demand and sales are strong, but fuel eats into the profit left over. Delta has warned airlines may need to slow flight growth next year to keep fares high, which can mean pricier tickets for travelers.
Who this affects
- MarketmixedMedium impact
- Airline investors face lower profit expectations, despite strong sales.
- CompanybearishMedium impact
- Southwest shareholders now face lower 2026 earnings per share.
- CompetitorsbearishMedium impact
- Delta and United also face higher fuel bills.
- IndustrybearishHigh impact
- Airlines may keep fares high or slow flight growth.
Southwest Airlines vs United Airlines, Delta Air Lines
How we got here
Delta cuts 2026 profit outlook to $5.10–$5.60 a share, expects $4.25 fuel in Q4.
United guides Q4 profit to $0.50–$1.50 a share, expects fuel at $4.80 a gallon.
Southwest cuts 2026 guidance to $2.60–$2.85 a share after Q3 fuel hits $3.92.
What to watch
- Whether Q4 fuel lands near Southwest's $4.55 assumption; Q4 profit guidance is $0.55–$0.80 a share.Q4 2026
- Southwest's long-term financial targets, due at its investor event.2027-03
Educational content only. Not investment advice.
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