A Southwest Airlines Boeing 737 aircraft arrives at Los Angeles International Airport from San Francisco on March 28, 2025 in Los Angeles, California.
Kevin Carter | Getty Images News | fake images
Southwest Airlines'Profits fell 42% in the first nine months of the year compared to the same period in 2024. But its shares have been rising.
Southwest shares are up nearly 24% so far in 2025, more than any other U.S. passenger airline. Industry profit leaders Delta Airlines and united airlines They are up about 17% each this year.
Shares of Southwest hit a two-and-a-half-year high this week. Analysts and investors have high hopes for the airline next year, when it completes its planned transformation from a single carrier to one that more closely resembles its larger rivals.
“What is helping Southwest's stock is clearly the initiatives, not the [demand] environment, because if that were the case it would be seen in all the other stocks as well,” said Savanthi Syth, airline analyst at Raymond James.
Southwest Airlines Stock Compared to the NYSE Arca Airline Index
Starting Jan. 27, Southwest will abandon open seating and move to assigned seating at all of its facilities.boeing Fleet 737. The first rows of seats have additional legroom, for a fee. Seat prices vary, but, for example, a flight from Baltimore to Las Vegas in early February showed seats costing about $80 each way.
Southwest forecast in October that assigned seating and seats with extra legroom could generate $1 billion in pretax profits next year and $1.5 billion in pretax profits in 2027.
“Because assigned seating, extra legroom, comes into play and there's a lot of value in that, of course, [results are] “The bookings we are seeing reflect the business case for assigned seating and additional legroom.”
Barclays upgraded Southwest's stock earlier this month, and transportation analyst Brandon Oglenski forecast that Southwest's adjusted earnings will be above $4 per share next year and surpass $6 per share in 2027.
The end of the cattle call boarding line comes months after the Dallas airline got rid of another decades-old policy: two free checked bags for customers. It also began selling its first basic, no-frills economy fares.
Southwest, like other airlines, cut its 2025 profit forecast after demand fell earlier this year as tariffs and cost cuts by President Donald Trump in Washington weighed on bookings. More recently, the government shutdown that ended last month hit demand, prompting Southwest to again lower its profit outlook for the year.
Southwest typically provides its annual outlook along with the prior year's earnings in late January.
