$LUV · SOUTHWEST AIRLINES CO
Southwest's 10-Q for Q3 FY2026 reports record total operating revenue of $8.422B, up 21.2% YoY, driven by a 22.8% rise in passenger revenue to $7.754B. Net income rose to $270M ($0.55 diluted EPS) from $54M ($0.10) a year earlier, with operating margin of 4.5%. Average passenger fare climbed 26.9% to $231.69 and yield per RPM rose 23.3% to 21.41 cents, reflecting the enhanced fare structure and new ancillary products.
- Q3 revenue hit a company record $8.422B, up 21.2% YoY.
- Net income rose to $270M from $54M; diluted EPS $0.55 vs $0.10.
- Average passenger fare up 26.9% to $231.69; yield up 23.3%.
- Fuel cost per gallon jumped 66.1% to $3.87 (unhedged).
- Company repurchased 28M shares in Q1 2026 for ~$1.27B including excise tax.
Shares closed +5.39% at $42.03; extended-hours last trade $41.79 (-0.57% vs close), a modest fade after the strong regular-session gain.
Southwest's premium-fare strategy is delivering record unit revenue and a 5x jump in profit, though fuel inflation is a growing offset.
Record RASM of 18.55 cents (+21.6% YoY) reflects Southwest's premium-fare and ancillary push, outpacing typical industry unit-revenue trends.
Fuel costs per gallon rose 66.1% to $3.87 unhedged, pressuring margins; 737-7 entry timing depends on FAA approvals outside company control.
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