Southwest Airlines Co 8-K, filed Oct 21, 2026

Southwest Airlines Co (LUV)

8-K 2026-10-21 For: 2026-10-21

Added on October 22, 2026

About this 8-K

Southwest Airlines Co filed this 8-K on October 21, 2026.

Southwest Airlines Co. reported third quarter 2026 net income of $270 million and operating revenues of $8.4 billion, up 21.2%, as unit revenues rose 21.6%; full-year 2026 adjusted EPS is forecast at $2.60 to $2.85. AI summary

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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P. O. Box 36611
Dallas,	Texas	75235-1611
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock ($1.00 par value)	LUV	New York Stock Exchange


	SOUTHWEST AIRLINES CO.

October 21, 2026	By:	/s/ Tom Doxey

		Tom Doxey
		Executive Vice President & Chief Financial Officer
		(Principal Financial Officer)


	Three months ended					Nine months ended
	September 30,					September 30,
	2026		2025		Percent Change	2026		2025		Percent Change
OPERATING REVENUES:
Passenger	$	7,754	$	6,313	22.8	$	22,091	$	18,751	17.8
Freight	48		42		14.3	141		127		11.0
Other	621		594		4.5	1,872		1,743		7.4
Total operating revenues	8,422		6,949		21.2	24,104		20,621		16.9

OPERATING EXPENSES:
Salaries, wages, and benefits	3,542		3,219		10.0	10,338		9,583		7.9

Aircraft fuel and related taxes	2,152		1,331		61.7	5,723		3,907		46.5
Maintenance materials and repairs	303		299		1.3	855		921		(7.2)
Landing fees and airport rentals	623		548		13.7	1,831		1,638		11.8
Depreciation and amortization	398		394		1.0	1,198		1,189		0.8
Other operating expenses	1,026		1,123		(8.6)	3,166		3,346		(5.4)
Total operating expenses	8,043		6,914		16.3	23,110		20,584		12.3

OPERATING INCOME	379		35		n.m.	994		37		n.m.

NON-OPERATING EXPENSES (INCOME):
Interest expense	70		35		100.0	188		120		56.7
Capitalized interest	(13)		(13)		—	(38)		(38)		—
Interest income	(33)		(34)		(2.9)	(90)		(172)		(47.7)

Other gains, net	(1)		(21)		(95.2)	(13)		(28)		(53.6)
Total non-operating expenses (income)	24		(33)		n.m.	47		(118)		n.m.

INCOME BEFORE INCOME TAXES	355		68		n.m.	946		155		n.m.
PROVISION FOR INCOME TAXES	85		14		n.m.	216		37		n.m.
NET INCOME	$	270	$	54	n.m.	$	730	$	118	n.m.

NET INCOME PER SHARE:
Basic	$	0.55	$	0.10	n.m.	$	1.48	$	0.21	n.m.
Diluted	$	0.55	$	0.10	n.m.	$	1.47	$	0.21	n.m.

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic	489		523		(6.5)	492		548		(10.2)
Diluted	494		526		(6.1)	497		551		(9.8)


		Three months ended							Nine months ended
		September 30,						Percent	September 30,						Percent
		2026			2025			Change	2026			2025			Change




	Operating revenues, as reported	$	8,422		$	6,949			$	24,104		$	20,621
(a)	Add: Breakage revenue adjustment	—			—				285			—
	Operating revenues, excluding special items	$	8,422		$	6,949		21.2	$	24,389		$	20,621		18.3

	Aircraft fuel and related taxes, unhedged	$	2,123		$	1,295			$	5,637		$	3,797
(b)	Add: Premium cost of fuel contracts designated as hedges	29			36				86			110

	Aircraft fuel and related taxes, as reported	$	2,152		$	1,331		61.7	$	5,723		$	3,907		46.5




	Total operating expenses, as reported	$	8,043		$	6,914			$	23,110		$	20,584



	Deduct: Impairment of long-lived assets	(30)			—				(30)			(8)
	Deduct: Litigation accruals	(13)			—				(13)			(19)
	Deduct: Transformation costs	—			(7)				—			(33)
(c)	Deduct: Severance and related costs	(30)			—				(45)			(62)

	Total operating expenses, excluding special items	$	7,970		$	6,907		15.4	$	23,022		$	20,462		12.5
	Deduct: Aircraft fuel and related taxes expense, as reported	(2,152)			(1,331)				(5,723)			(3,907)
	Operating expenses, excluding Aircraft fuel and related taxes expense and special items	$	5,818		$	5,576		4.3	$	17,299		$	16,555		4.5
	Deduct: Profit-sharing expense	(62)			(11)				(165)			(26)
	Operating expenses, excluding Aircraft fuel and related taxes expense, special items, and profit sharing	$	5,756		$	5,565		3.4	$	17,134		$	16,529		3.7

	Operating income, as reported	$	379		$	35			$	994		$	37
(a)	Add: Breakage revenue adjustment	—			—				285			—



	Add: Impairment of long-lived assets	30			—				30			8
	Add: Litigation accruals	13			—				13			19
	Add: Transformation costs	—			7				—			33
(c)	Add: Severance and related costs	30			—				45			62

	Operating income, excluding special items	$	452		$	42		976.2	$	1,367		$	159		759.7

	Total operating revenues, as reported	$	8,422		$	6,949			$	24,104		$	20,621
	Operating margin, as reported	4.5		%	0.5		%	4.0 pts.	4.1		%	0.2		%	3.9 pts.
	Add: Impact of special items	0.9		%	0.1		%		1.5		%	0.6		%
	Operating margin, excluding special items	5.4		%	0.6		%	4.8 pts.	5.6		%	0.8		%	4.8 pts.






	Income before income taxes, as reported	$	355		$	68			$	946		$	155
(a)	Add: Breakage revenue adjustment	—			—				285			—



	Add: Litigation accruals	13			—				13			19
	Add: Transformation costs	—			7				—			33
(c)	Add: Severance and related costs	30			—				45			62


SOUTHWEST AIRLINES CO.
(Exact name of registrant as specified in its charter)


Not Applicable
(Former name or former address, if changed since last report)


Southwest Airlines Co. Investor Relations investor.relations@wnco.com


	Add: Impairment of long-lived assets	30			—				30			8
	Income before income taxes, excluding special items	$	428		$	75		470.7	$	1,320		$	277		376.5

	Provision for income taxes, as reported	$	85		$	14			$	216		$	37
(d)	Add: Net income tax impact of special items	16			3				85			29
	Provision for income taxes, net, excluding special items	$	101		$	17		494.1	$	301		$	66		356.1

	Net income, as reported	$	270		$	54			$	730		$	118
(a)	Add: Breakage revenue adjustment	—			—				285			—



	Add: Litigation accruals	13			—				13			19
	Add: Transformation costs	—			7				—			33
(c)	Add: Severance and related costs	30			—				45			62

	Add: Impairment of long-lived assets	30			—				30			8
(d)	Deduct: Net income tax impact of special items	(16)			(3)				(85)			(29)
	Net income, excluding special items	$	328		$	58		465.5	$	1,019		$	211		382.9

	Total operating revenues, as reported	$	8,422		$	6,949			$	24,104		$	20,621
	Net margin, as reported	3.2		%	0.8		%	2.4 pts.	3.0		%	0.6		%	2.4 pts.
	Add: Impact of special items	0.9		%	0.1		%		1.5		%	0.6		%
(d)	Deduct: Net income tax impact of special items	(0.2)		%	—		%		(0.3)		%	(0.1)		%
	Net margin, excluding special items	3.9		%	0.8		%	3.1 pts.	4.2		%	1.0		%	3.2 pts.

	Net income per share, diluted, as reported	$	0.55		$	0.10			$	1.47		$	0.21
	Add: Impact of special items	0.15			0.02				0.75			0.22

(d)	Deduct: Net income tax impact of special items	(0.04)			(0.01)				(0.17)			(0.05)


	Net income per share, diluted, excluding special items	$	0.66		$	0.11		500.0	$	2.05		$	0.38		439.5





	Operating revenues per ASM (cents), as reported	18.55		¢	15.25		¢		17.92		¢	15.39		¢
	Add: Impact of special items	—			—				0.21			—
	Operating revenues per ASM, excluding special items (cents)	18.55		¢	15.25		¢	21.6	18.13		¢	15.39		¢	17.8





	Operating expenses per ASM (cents)	17.72		¢	15.17		¢		17.18		¢	15.36		¢
	Deduct: Impact of special items	(0.16)			(0.02)				(0.07)			(0.09)
	Deduct: Aircraft fuel and related taxes expense divided by ASMs	(4.74)			(2.92)				(4.25)			(2.91)
	Deduct: Profit-sharing expense divided by ASMs	(0.14)			(0.02)				(0.12)			(0.02)


Operating expenses per ASM, excluding Aircraft fuel and related taxes expense, special items, and profit sharing (cents)	12.68	¢	12.21	¢	3.8	12.74	¢	12.34	¢	3.2


	September 30, 2026		December 31, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	3,624	$	3,231

Accounts and other receivables	1,313		1,149
Inventories of parts and supplies, at cost	997		775
Prepaid expenses and other current assets	572		490
Total current assets	6,506		5,645
Property and equipment, at cost:
Flight equipment	26,144		26,293
Ground property and equipment	9,686		9,163
Deposits on flight equipment purchase contracts	723		401
Assets constructed for others	88		88
	36,642		35,945
Less allowance for depreciation and amortization	15,654		15,700
	20,988		20,245
Goodwill	970		970
Operating lease right-of-use assets	994		1,089
Other assets	1,081		1,112
	$	30,539	$	29,061
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,847	$	1,991
Accrued liabilities	2,382		2,349
Current operating lease liabilities	278		312
Air traffic liability	7,078		5,945
Current maturities of long-term debt	2,153		324
Total current liabilities	13,738		10,921

Long-term debt less current maturities	3,734		4,577
Air traffic liability - noncurrent	1,199		1,219
Deferred income taxes	2,513		2,289

Noncurrent operating lease liabilities	706		768
Other noncurrent liabilities	1,320		1,306
Stockholders' equity:
Common stock	888		888
Capital in excess of par value	4,326		4,322
Retained earnings	16,853		16,388
Accumulated other comprehensive income (loss)	51		(24)
Treasury stock, at cost	(14,790)		(13,593)
Total stockholders' equity	7,329		7,981
	$	30,539	$	29,061


	Three months ended September 30,				Nine months ended September 30,
	2026		2025		2026		2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	270	$	54	$	730	$	118
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	398		394		1,198		1,189
Impairment of long-lived assets	30		—		30		8



Deferred income taxes	83		14		201		37

Gain on sale of property and equipment	(96)		(13)		(272)		(28)
Gain on sale-leaseback transactions	(118)		—		(118)		(3)

Changes in certain assets and liabilities:
Accounts and other receivables	(95)		(83)		(151)		64
Other assets	(41)		3		(156)		359
Accounts payable and accrued liabilities	41		11		(14)		(209)
Air traffic liability	92		(172)		1,113		(117)
Other liabilities	(86)		16		(216)		(19)
Cash collateral provided to derivative counterparties	—		—		—		(22)
Other, net	33		63		115		170
Net cash provided by operating activities	513		287		2,460		1,547

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(1,006)		(735)		(2,454)		(1,922)
Proceeds from sale of property and equipment	285		57		735		108


Proceeds from sale-leaseback transactions	212		—		212		23
Purchases of short-term investments	—		(100)		—		(470)
Proceeds from sales of short-term and other investments	—		350		—		1,577
Other, net	—		—		(6)		(3)
Net cash used in investing activities	(509)		(428)		(1,513)		(687)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of long-term debt	—		—		1,500		—





Proceeds from Employee stock plans	14		14		46		46

Repurchase of common stock	—		(250)		(1,250)		(2,500)
Payments of long-term debt and finance lease obligations	(5)		(6)		(442)		(2,603)


Payments of cash dividends	(176)		(189)		(357)		(399)




Other, net	(4)		(1)		(51)		(11)
Net cash used in financing activities	(171)		(432)		(554)		(5,467)

NET CHANGE IN CASH AND CASH EQUIVALENTS	(167)		(573)		393		(4,607)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	3,791		3,475		3,231		7,509

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	3,624	$	2,902	$	3,624	$	2,902


	Twelve months ended				Twelve months ended
	September 30, 2026				September 30, 2025
Operating income, as reported	$	1,384			$	315
Breakage revenue adjustment	285				116
Severance and related costs	45				62
Voluntary Employee programs	—				5



Net impact from fuel contracts	—				(25)
Professional advisory fees	—				18
Transformation costs	—				37
DOT settlement	(11)				—
Litigation accruals	13				19
Impairments	30				8
Operating income, non-GAAP	$	1,747			$	555
Net adjustment for aircraft leases (a)	214				201
Adjusted operating income, non-GAAP (A)	$	1,961			$	756

Non-GAAP tax rate (B)	22.7		%	(d)	22.4		%	(e)

Net operating profit after-tax, NOPAT (A* (1-B) = C)	$	1,516			$	587

Debt, including finance leases (b)	$	5,244			$	5,921


Equity (b)	7,409				9,181
Net present value of aircraft operating leases (b)	814				977
Average invested capital	$	13,467			$	16,079
Equity adjustment for hedge accounting (c)	(8)				32
Adjusted average invested capital (D)	$	13,459			$	16,111

Non-GAAP ROIC, pre-tax (A/D)	14.6		%		4.7		%

Non-GAAP ROIC, after-tax (C/D)	11.3		%		3.6		%


	September 30, 2026

Current maturities of long-term debt, as reported	$	2,153
Long-term debt less current maturities, as reported	3,734
Total debt, including finance leases (A)	5,887
Add: Current operating lease liabilities, as reported	278
Add: Noncurrent operating lease liabilities, as reported	706
Adjusted debt (B)	$	6,871

	Twelve Months Ended
	September 30, 2026
Net income, as reported (C)	$	1,053
Interest expense (income), net of capitalized interest, as reported	59
Income tax expense (benefit), as reported	300
Non-operating other (gains) losses, net, as reported	(28)
Operating income, as reported	1,384
Impact of special items	363
Operating income, non-GAAP	1,747
Depreciation and amortization	1,569
Fixed portion of operating lease expense	345
Adjusted EBITDAR (D)	$	3,661

Total debt to Net income (A/C)	5.6x
Adjusted debt to adjusted EBITDAR (B/D)	1.9x


	Three months ended							Nine months ended
	September 30,						Percent	September 30,						Percent
	2026			2025			Change	2026			2025			Change
Revenue passengers carried (000s)	33,467			34,581			(3.2)	96,973			100,078			(3.1)
Enplaned passengers (000s)	43,310			43,806			(1.1)	125,105			125,330			(0.2)
Revenue passenger miles (RPMs) (in millions) (a)	36,214			36,362			(0.4)	104,711			103,875			0.8
Available seat miles (ASMs) (in millions) (b)	45,393			45,567			(0.4)	134,535			133,994			0.4
Load factor (c)	79.8		%	79.8		%	— pts.	77.8		%	77.5		%	0.3 pts.
Average length of passenger haul (miles)	1,082			1,051			2.9	1,080			1,038			4.0
Average aircraft stage length (miles)	776			784			(1.0)	779			781			(0.3)
Trips flown	357,374			356,952			0.1	1,055,484			1,056,790			(0.1)
Seats flown (000s) (d)	57,593			57,643			(0.1)	169,631			170,145			(0.3)
Seats per trip (e)	161.2			161.5			(0.2)	160.7			161.0			(0.2)
Average passenger fare	$	231.69		$	182.56		26.9	$	227.81		$	187.36		21.6
Passenger revenue yield per RPM (cents) (f)	21.41			17.36			23.3	21.10			18.05			16.9

RASM (cents) (g)	18.55			15.25			21.6	17.92			15.39			16.4
RASM, excluding special items (cents)	18.55			15.25			21.6	18.13			15.39			17.8
PRASM (cents) (h)	17.08			13.85			23.3	16.42			13.99			17.4
CASM (cents) (i)	17.72			15.17			16.8	17.18			15.36			11.8
CASM, excluding fuel (cents)	12.98			12.25			6.0	12.92			12.45			3.8
CASM, excluding special items (cents)	17.56			15.16			15.8	17.11			15.27			12.0
CASM, excluding fuel and special items (cents)	12.82			12.24			4.7	12.86			12.36			4.0
CASM, excluding fuel, special items, and profit sharing (cents)	12.68			12.21			3.8	12.74			12.34			3.2
Fuel costs per gallon, including fuel tax (unhedged)	$	3.87		$	2.33		66.1	$	3.50		$	2.33		50.2
Fuel costs per gallon, including fuel tax	$	3.92		$	2.40		63.3	$	3.56		$	2.40		48.3
Fuel consumed, in gallons (millions)	548			554			(1.1)	1,607			1,624			(1.0)
Active fulltime equivalent Employees	73,092			72,223			1.2	73,092			72,223			1.2
Aircraft at end of period	803			802			0.1	803			802			0.1