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Worth notingMarket eventWed, Oct 211 min read
A third major US airline has cut its profit forecast this month, showing higher fuel costs squeezing earnings across the industry.
Southwest Airlines lowered its 2026 profit forecast because of higher fuel costs. The carrier now expects full-year adjusted earnings per share of $2.60 to $2.85—a measure of profit per share that excludes certain items under the company's reporting approach.[1]
Southwest is the third major US airline this month to cut its 2026 profit forecast because of higher fuel prices.[2]
More expensive jet fuel raises the cost of operating flights. Unless ticket revenue or savings elsewhere offset that expense, airlines retain less profit from each passenger; Southwest's forecast cut shows that pressure reaching its full-year earnings outlook.[1]
CEO Bob Jordan says Southwest is planning as though higher fuel costs will persist into 2027.[3] That puts fares, spending and flight schedules under scrutiny as the company plans next year: recovering costs from passengers depends on demand and competition, and higher fares could weaken bookings.[3]
Southwest and its rivals face pressure to absorb higher fuel bills, with three major carriers cutting profit forecasts this month. Airlines able to sustain fares and passenger demand, or find savings elsewhere, are better placed to protect profits; competition that limits fare increases leaves earnings more exposed.[2][1]