Southwest slashed its full-year profit guidance this week in the face of rising jet fuel costs.
The carrier started out 2026 projecting full-year adjusted earnings per share of $4. At the end of the second quarter, it broadened that guidance to between $3.25 and $4.25.
On Wednesday, Southwest reset that figure to between $2.60 and $2.85. The airline cited headwinds from fuel, which could worsen in the fourth quarter.
Southwest’s third-quarter fuel cost was $3.92 per gallon, above prior assumptions of $3.70 to $3.75 per gallon. For the upcoming fourth quarter, fuel cost per gallon is assumed to be about $4.55, based on the forward price curve as of Oct. 15, the carrier said.
Oil prices hit a five-month high this week as the U.S. and Iran continue to fight for control of the Strait of Hormuz and the Houthis in Yemen bomb oil and natural gas infrastructure in neighboring Saudi Arabia.
Southwest on Wednesday posted record third-quarter operating revenues of $8.4 billion and net income of $270 million, up from $54 million in the third quarter of 2025. Unit revenues increased by 21.6%, another all-time record for the company.
Southwest said consumer demand and margins remain strong despite the increase in fuel costs.