On March 28, 2025 in Los Angeles, California, a Southwest Airlines Boeing 737 arrives at Los Angeles International Airport from San Francisco.
Kevin Carter | Getty Images News | Getty Images
southwest airlines‘s profits fell 42% in the first nine months of this year compared to the same period in 2024. However, the company’s stock price has fallen.
Southwest Airlines stock is up nearly 24% so far in 2025, outpacing any other U.S. passenger airline. industry profit leader delta airlines and united airlines Each has risen about 17% this year.
Southwest stock hit a 2-1/2-year high this week. Analysts and investors have high hopes for next year, when the airline completes its planned transformation from a one-size-fits-all airline to one more similar to its larger rivals.
“It’s clearly commitment, not the (demand) environment, that is supporting Southwest’s stock price, and if that’s the case, you’re going to see the same effect on all the other stocks,” said Savanti Sith, an aviation analyst at Raymond James.
Comparison of Southwest Airlines stock price and NYSE Arca Airlines Index
Starting January 27th, Southwest Airlines will eliminate unreserved seats and shift to all reserved seats.boeing 737 aircraft. Additional legroom is available in the front row of seats (surcharge). Seat prices vary, but on a flight from Baltimore to Las Vegas in early February, for example, seats were selling for about $80 each way.
Southwest Airlines predicted in October that reserved seats and seats with extra legroom could boost pretax profits by $1 billion next year and $1.5 billion in 2027.
Southwest CEO Bob Jordan told CNBC on Dec. 10 that “of course (the results) will get better year after year because the increased assigned seating and legroom is going to be effective and there’s a lot of value in that.” “The bookings we are seeing reflect the business case for reserved seating and additional legroom.”
Barclays upped its stock price on Southwest Airlines earlier this month, and transportation analyst Brandon Oglensky expects the airline’s adjusted earnings to exceed $4 a share next year and $6 a share in 2027.
The end of the cattle call boarding lineup comes months after the Dallas airline ended its decade-old policy of giving customers two free checked bags. It also began selling its first no-frills basic economy fare.
Southwest Airlines joined other airlines in cutting its 2025 profit forecast after President Donald Trump’s tariffs and cost-cutting measures in Washington weighed on bookings and demand slumped earlier this year. More recently, Southwest Airlines again cut its profit outlook for this year after demand was hit by the government shutdown that ended last month.
Southwest Airlines typically releases its full-year outlook in late January, along with the previous year’s results.
