Southwest Airlines Co. is a passenger airline providing scheduled air transportation in the United States and internationally. Its offerings include the Rapid Rewards loyalty program, the SWABIZ online booking tool, an inflight entertainment platform with live and on-demand television, movies-on-demand, a flight tracker and curated content, plus premium snacks and coffee. The company also provides ancillary services such as in-flight purchases, baggage fees, EarlyBird Check-In, upgraded boarding, and transportation of pets and unaccompanied minors. As of December 31, 2025, it operated a fleet of 803 Boeing 737 aircraft and served 117 destinations in 42 states, the District of Columbia, the Commonwealth of Puerto Rico, and ten near-international countries including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. Incorporated in 1967, Southwest Airlines Co. is headquartered in Dallas, Texas.
Southwest cuts guidance on fuel costs, but premium and AI bets build
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Fuel costs force guidance cut and slower growth Southwest cut Q3 and full-year earnings guidance because jet fuel prices have surged, and it halved planned 2026 capacity growth. Higher fuel eats into profit, and slower growth limits revenue, so the stock faces real pressure. Analysts at Zacks rate it a Strong Sell.
This is the main new negative force this period, directly hitting earnings and guidance.
Premium lounges and Chase card deepen loyalty Southwest announced its first airport lounges, built with Chase, plus a new premium Rapid Rewards credit card launching in 2027. This upscale push aims to attract higher-spending travelers and boost revenue, supporting the stock as a growth story beyond cheap fares.
It is a new strategic move that could lift future revenue and investor sentiment.
AI booking plugin and corporate tools expand reach Southwest launched a ChatGPT plugin for flight discovery and booking, and rolled out new corporate travel tools like Business Priority and NDC connectivity. These digital moves aim to capture travelers earlier and win more business customers, which could lift demand and revenue over time.
New technology and corporate offerings show Southwest investing in future growth channels.
Boeing 737 MAX software glitch delays deliveries; 787 long-haul eyed A Boeing 737 MAX software issue led Southwest to refuse new planes with the current software, delaying deliveries and constraining growth. Separately, Southwest is leaning toward Boeing 787s for long-haul international flights, which could open new markets but is not yet decided.
It captures both a near-term supply risk and a potential long-term growth option.
Southwest Said to Lean Toward Boeing 787 for Long-Haul Fleet
Southwest Airlines is leaning toward Boeing's 787 Dreamliner as its first widebody jet as it weighs launching long-haul international flights, Reuters reported, citing people familiar with the carrier's fleet planning. No final aircraft decision has been made, the report added, and the choice would ultimately rest with Southwest's board, which last year formed a Fleet Oversight Committee to help oversee the company's aircraft fleet acquisition strategy. Southwest has not publicly named an aircraft for long-haul flying; in September, CFO Tom Doxey said long-haul international service was among a range of options under consideration but that no decision had been made. According to the report, Southwest has contemplated a fleet of dozens of 787s and has also examined how quickly it could obtain aircraft, including through lessors or the secondary market, though it was not clear which 787 variant it is considering or whether any leasing arrangements have been made. Southwest did not directly address questions about the 787, saying in a statement, "We do not have any news forthcoming related to our fleet plans," the report added.
BA · Demand · Positive Southwest is leaning toward Boeing's 787 Dreamliner for its first widebody long-haul fleet, a potential order for dozens of aircraft.
LUV · Demand · Neutral Southwest weighs launching long-haul international flights with a widebody fleet, but no final aircraft decision has been made.
Southwest Airlines Cuts Q3 and Full-Year Guidance on Surging Fuel Costs
Southwest Airlines has lowered its earnings guidance for the third quarter and full year, citing surging fuel costs and plans to trim capacity growth despite healthy demand. The carrier has simultaneously been pushing deeper into digital engagement and loyalty, including an AI booking plugin and a burnout-focused Rapid Rewards campaign, as it looks to offset cost pressures through product and marketing innovation. Southwest's narrative projects $35.8 billion in revenue and $2.6 billion in earnings by 2029, requiring 6.0% yearly revenue growth and about a $1.8 billion earnings increase from $837.0 million today. Before this fuel-driven guidance cut, the most optimistic analysts were modeling revenue of about US$38.6 billion and earnings near US$3.7 billion, far more upbeat than consensus. The latest guidance cut keeps fuel at the center of the near-term story, since elevated prices and slower growth directly affect margins and the key earnings recovery catalyst.
Southwest Airlines Cut to Zacks Rank #5 Strong Sell as Fuel Costs Hit Guidance
Southwest Airlines holds a Zacks Rank #5 (Strong Sell) as surging fuel costs pressure the carrier's outlook. Southwest absorbed nearly $900 million in additional fuel expense year over year in the second quarter alone, and its Q3 guidance assumed jet fuel of $3.70 to $3.75 per gallon based on the forward curve as of July 17, an assumption now at risk after oil moved sharply higher. The company reported Q2 adjusted earnings of $0.94 per share on July 22, beating the $0.52 consensus, but revenue of $8.43 billion missed expectations of $8.58 billion, and it guided Q3 earnings to $0.50 to $0.75 per share, below the $0.77 consensus at the time, while widening full-year EPS guidance to a range of $3.25 to $4.25 from its prior call of more than $4.00. Capacity growth for 2026 has been cut roughly in half from the original plan of 2% to 3%, and over the last 60 days the current-year consensus has dropped from $3.41 to $3.16 while next year's estimate fell from $5.44 to $5.04. Southwest reports Q3 results after the close on October 21, with the Earnings ESP at -9.84% and the Most Accurate Estimate of $0.57 below the $0.63 consensus.
Southwest Airlines Launches AI-Powered Flight Planning Plugin on ChatGPT
Southwest Airlines has launched a ChatGPT plugin that brings flight discovery and shopping directly into a conversational experience, developed in partnership with OpenAI and Amazon Web Services. The airline is taking a phased approach, treating the launch not simply as a new booking channel but as a foundation for expanding AI capabilities across the customer journey. Southwest shares have gained 31.1% over the past year compared with the Transportation - Airline industry's 5.1% growth, and the stock currently carries a Zacks Rank #5 (Strong Sell). Among better-ranked names in the Zacks Transportation sector, Kirby carries a Zacks Rank #2 (Buy) with an expected earnings growth rate of 12.3% for 2026, while Herc Holdings sports a Zacks Rank #1 with a negative expected earnings growth rate of 8.4% for the current year.
Southwest Airlines Launches First-of-Its-Kind U.S. Airline Plugin in ChatGPT
Southwest Airlines Co. launched a first-of-its-kind U.S. airline plugin in ChatGPT, the first step in a phased AI-powered booking approach with OpenAI and Amazon Web Services. The plugin lets travelers discover and shop for Southwest flights inside ChatGPT, allowing the airline to appear earlier in the customer journey and offer a more direct path from inspiration to booking options. Sabrina Callahan, Southwest's Chief Digital and Marketing Officer, said customers are evolving how they plan travel and Southwest is helping shape what comes next, while Executive Vice President and Chief Information Officer Lauren Woods said the carrier is building a secure, scalable AI foundation so it can add new capabilities more quickly. Southwest, which operates at 120 airports across 12 countries and carried more than 134 million customers in 2025, is working with OpenAI and AWS to combine AI and cloud technologies with its customer knowledge and expand AI-powered capabilities over time. The airline said more information is available at Southwest.com/chatgpt.
Boeing finds 737 MAX software glitch affecting navigation, fix expected by early 2028
Boeing has discovered a software glitch in its 737 MAX series of airplanes that could cause an automated navigation system to fail during certain landings, according to a document obtained by The Wall Street Journal. The scenario can occur when pilots change their flight paths due to a missed approach, and in one possibility the crew would have to fly manually as some autopilot features would be disabled. Airlines operating the 737 MAX were notified of the issue in August, with Boeing saying it did not warrant safety concerns and that it shared information reinforcing existing pilot procedures for safely handling such cases. Boeing said its engineers are working on a software update to permanently address the issue, which it expects by early 2028. Southwest and United Airlines, two of the largest operators of the 737 MAX, told Boeing they do not want new MAX aircraft with the current software and prefer an older version, while the FAA is investigating the matter and will take action as warranted.
BA · Technology · Negative Boeing discovered a 737 MAX software glitch that can disable autopilot during certain landings, requiring a fix not expected until early 2028.
LUV · Supply · Negative Southwest told Boeing it does not want new 737 MAX aircraft with the current software and prefers an older version, delaying deliveries.
UAL · Supply · Negative United told Boeing it does not want new 737 MAX aircraft with the current software and prefers an older version, delaying deliveries.
American, United and Southwest Cut Flights as Q4 Fuel Costs Jump $1B
American Airlines, United Airlines and Southwest Airlines are scaling back or reconsidering planned flight schedules as jet fuel prices surge, a move that could leave travelers with fewer flight options and potentially higher fares heading into the holiday season. For American, the latest jump in fuel prices alone is expected to add roughly $1 billion to its fourth-quarter fuel costs compared with the assumptions it made in July, after fourth-quarter fuel prices rose by roughly $1 per gallon from that July level, according to CFO Devon May, who noted that every one-cent change in fuel prices affects quarterly costs by about $10 million. United has already said some flights scheduled for December will no longer operate and warned of additional adjustments in the first quarter of 2027 and beyond if fuel prices remain elevated, while Southwest has roughly halved its planned 2026 capacity growth from an original target of about 2% to 3%, with its CFO saying further reductions could follow. The International Air Transport Association reported the global average jet fuel price rose 7.4% to $194.90/bbl from the week before, and its June outlook noted that airlines could rationalize capacity by trimming less-profitable routes or reducing flight frequencies. Executives from all three carriers said demand has remained resilient despite higher fares, and that combination of strong demand and less available capacity can give airlines more ability to maintain or increase fares.
Redburn upgrades Southwest to Neutral, keeps Buy on Delta and United
Redburn upgraded Southwest Airlines to Neutral from Sell while reiterating Buy ratings on Delta and United, citing a strong sector backdrop. Analyst James Goodall said results through the first half of 2026 confirmed strong leisure and premium demand and acceptance of higher domestic fares, and he expects lingering capacity constraints, softer low-cost carrier competition and premium strength to drive continued unit revenue growth into next year. Redburn lifted its jet fuel cost forecasts materially above consensus, seeing downside to 2026 earnings across the sector, though it argued that is largely priced in after recent share price falls. Its 2027 forecasts are ahead of consensus for Delta and United, with target prices of $105 and $150 respectively, while Southwest carries a $40 target and American keeps a Neutral rating and a $13.50 target on greater fuel-price sensitivity.
Southwest to Open First Airport Lounges in 2027 With JPMorgan Card
Southwest Airlines disclosed plans on September 2 to open its first-ever airport lounges, partnering with JPMorgan Chase on a new premium co-branded credit card launching in 2027 that will provide access. The first four lounges will open at Austin, Baltimore, Honolulu, and Nashville airports in late 2027, part of a longer-term plan for a network of at least 11 locations. The move continues Southwest's shift away from its historic no-frills model of free bags, open seating, and a single cabin, having already introduced assigned and tiered seating and bag fees for most passengers. CEO Bob Jordan has separately signaled Southwest could eventually add cabin options including true first class and long-haul international flying, though he described those as still just ideas. The transformation continues under pressure from activist investor Elliott Investment Management following weaker post-pandemic margins and comes as rising fuel costs from the U.S.-Israel-Iran conflict squeeze industry-wide airline margins.
Southwest Airlines Unveils First-Ever Lounge Network with Chase
Southwest Airlines Co. announced plans for its first-ever airport lounge network, partnering with Chase to create premium lounges that blend Southwest's hospitality with the Chase Sapphire Reserve Lounge Network. Construction has begun on the first four lounges, set to debut in late 2027 at Austin-Bergstrom International Airport, Baltimore/Washington International Thurgood Marshall Airport, Daniel K. Inouye (Honolulu) International Airport, and Nashville International Airport, with at least seven more lounges planned across high-demand markets. Access will be provided through a new premium Southwest Rapid Rewards credit card issued by Chase, launching in 2027. Tony Roach, Executive Vice President and Chief Customer & Brand Officer, called the lounges a strategic investment in Rapid Rewards that deepens the 30-year partnership with Chase.
Southwest Airlines reported second quarter 2026 adjusted earnings of $0.94 per share, exceeding estimates and supported by strong passenger revenues and record managed business revenue. The company also issued guidance for the third quarter and full year 2026 pointing to continued adjusted earnings and revenue growth alongside cost discipline. Despite the solid Q2 report, Southwest Airlines shares have been under pressure recently, with a 30-day share price return of down 15.27% and a year-to-date share price return of down 2.23%, while the 1-year total shareholder return of 25.54% and 3-year total shareholder return of 38.03% indicate longer-term holders have still seen gains. The most followed narrative for Southwest Airlines points to a fair value of $51.79 compared with the latest close at $40.38, implying a 22% undervaluation based on its own assumptions. Planned introduction of premium and assigned seating, along with basic economy offerings, can enhance revenue yield through differentiated pricing strategies, potentially boosting net margins and overall earnings.
FAA certifies Boeing 737 MAX 7 after years of delays
The FAA certified Boeing's 737 MAX 7 on Monday, the smallest version of its bestselling jet, nearly a decade after the company first expected approval. Boeing shares jumped as much as 8% on the news, part of a broader rally that also included an analyst upgrade and falling oil prices. The approval unlocks real cash for Boeing, since manufacturers collect most of a plane's price on delivery, and Boeing already has roughly 30 to 40 MAX 7s and MAX 10s built and waiting. However, launch customer Southwest Airlines still won't fly the MAX 7 this year because its own planes need extra-legroom seat upgrades, and the airline says revenue service won't start until 2027. Jefferies noted Boeing already has 282 orders for the MAX 7, and the FAA is expected to clear the larger MAX 10 right behind it.
Airlines scramble for jet fuel as Strait of Hormuz closure drags on
The months-long closure of the Strait of Hormuz has triggered severe global jet fuel shortages, forcing airlines to cut flights and seek alternative supplies. Europe faces a jet fuel supply deficit of almost 600,000 barrels per day in the third quarter, according to consultancy Energy Aspects, compared with surpluses of around 116,000 barrels per day in the United States and 425,000 barrels per day in Asia-Pacific. Jet fuel prices spiked to a high of $215.32 a barrel in late March before easing to just over $130. Ryanair reported an 11% rise in operating costs after 20% of its unhedged fuel was hit by price spikes, while Southwest Airlines shipped 12.6 million gallons of fuel from Texas to California via the Panama Canal to ease West Coast shortages. United Airlines expects nearly $6 billion in additional fuel expense for full-year 2026 compared with its forecast at the start of the year.
Global commercial flights hit single-day record of 153,359 on July 23
Global commercial flights reached a new single-day record of 153,359 on July 23, according to tracking data, underscoring robust demand that has lifted major U.S. airline stocks. Delta Air Lines, United Airlines Holdings, and Southwest Airlines all reported strong second-quarter results in July, with Delta beating revenue and earnings expectations and projecting full-year 2026 income of about $73 billion, 15% above 2025 levels. United raised its full-year earnings forecast to $9 to $11 per share, while Southwest posted earnings of $0.94 a share on revenue of $8.72 billion, exceeding analyst estimates. Despite the positive performance, rising jet fuel costs remain a risk, with United warning that higher fuel prices could add up to $6 billion to its expenses this year and Southwest noting it has raised fares in response. Jet fuel typically accounts for 20% to 30% of an airline's operating expenses, and further spikes tied to Persian Gulf tensions could pose headwinds.
FAA certifies Boeing 737 MAX 7 after years of review
The Federal Aviation Administration has certified the Boeing 737 MAX 7, the smallest member of the MAX family, marking the first new aircraft certification for Boeing since the MAX crashes. The approval follows a lengthy regulatory review and clears a path for deliveries to Southwest Airlines, a key customer for the MAX 7. The decision directly affects Boeing's commercial aircraft business, which depends on narrowbody jets as a core revenue source. With deliveries to Southwest now possible, investors can focus more on execution risks around production quality, delivery timelines, and customer support. The certification arrives shortly after Boeing's second quarter 2026 results, where revenue was US$24,560 million and the company reported a loss of US$444 million.
Southwest Airlines unveils Business Priority and NDC connectivity for corporate travel
Southwest Airlines announced new benefits for its Southwest Business program, including a Business Priority product and New Distribution Capability connectivity. The Business Priority option, available in early 2027 for qualified corporate travel agreements, will offer preferred reaccommodation, standby, and boarding benefits. Southwest is also introducing NDC capabilities, with an evolved in-house API expected by the end of 2026 and Amadeus Altéa NDC connectivity anticipated later in 2027. These moves aim to give corporate buyers greater flexibility and access to Southwest's fare products and seating ancillaries through third-party booking tools.
U.S. Airlines Slash Earnings Outlooks as Jet Fuel Costs Soar on Middle East Conflict
U.S. airlines are slashing earnings forecasts after renewed Middle East hostilities pushed jet fuel costs sharply higher. Southwest Airlines reported a $900 million year-over-year jump in second-quarter fuel expenses, a $1.17 headwind to adjusted earnings per share, and cut its full-year 2026 adjusted EPS guidance to a range of $3.25 to $4.25 from at least $4.00. American Airlines saw fuel expense surge over $2.2 billion, or 83%, and now expects full-year adjusted diluted EPS between a loss of $0.65 and earnings of $0.65, with a third-quarter loss of $0.10 to $0.70 per share. United Airlines anticipates nearly $6 billion in added fuel expense for full-year 2026 and reported a $2.3 billion, or 84%, jump in second-quarter fuel costs. The spike follows the collapse of a U.S.-Iran memorandum of understanding and a ceasefire, which reignited crude and fuel price rallies, while record U.S. fuel exports and tight global markets add further pressure.
Southwest Airlines cuts full-year profit guidance on rising fuel costs
Southwest Airlines has slashed its full-year 2026 adjusted earnings per share guidance to a range of $3.25 to $4.25, down from a prior forecast of at least $4, as rising jet fuel prices weigh on profitability. CEO Bob Jordan said the airline faces an estimated year-to-date fuel headwind of about $1.33 per share, with jet fuel averaging $3.92 per gallon in the second quarter and pushing fuel expense up by nearly $900 million compared to the same period last year. Despite the pressure, Jordan noted that earnings remain broadly in line with original expectations, while record second-quarter adjusted unit revenue growth of 20.1% and a 30% jump in managed business revenue underscore strong demand. The carrier also reported liquidity of $5.3 billion and nearly $2 billion in operating cash flow for the first half of the year.
CSX and Knight-Swift Beat Estimates as Freight Cycle Turns, Southwest Misses on Fuel Costs
Three transportation companies reported earnings this week, revealing diverging fortunes as fuel costs surged after the Iran war began. Railroad firm CSX Corporation beat expectations with revenue rising 10% to $3.94 billion and profit of $1 billion, or 54 cents a share, driven by strong intermodal shipments, while raising its full-year outlook. Trucking company Knight-Swift Transportation Holdings saw adjusted earnings jump 80% to 63 cents per share on revenue of $2.1 billion, as a tightening truck market pushed up prices and its intermodal business neared breakeven. In contrast, Southwest Airlines posted adjusted earnings of 94 cents per share, nearly double estimates, but revenue of $8.43 billion missed expectations and a one-time accounting change inflated results; its fuel bill soared 67% to $2.22 billion, forcing it to lower full-year profit guidance to a range of $3.25 to $4.25 per share. Hedge fund data showed Knight-Swift held by 53 funds with an average portfolio weight of 19.6%, signaling strong institutional confidence ahead of the results.
Air Premia and Klarna Partnerships Expand Southwest Airlines' Reach and Payment Options
Southwest Airlines has entered an interline partnership with Air Premia and a long-term payment collaboration with Klarna Group plc, extending its network to over 120 U.S. destinations for Korean travelers and offering U.S. customers flexible payment options including installments and financing. The Air Premia deal opens East Asian access to Southwest's domestic network, while the Klarna agreement broadens the airline's payment ecosystem. These moves are part of Southwest's strategy to reach more customers through more channels, alongside expanded Expedia distribution, though they do not materially alter near-term reliance on fare product rollouts and cost control. The company's narrative projects $34.5 billion in revenue and $2.3 billion in earnings by 2029, requiring 6.1% annual revenue growth and a $1.5 billion earnings increase from $817.0 million.
LUV · Demand · Positive Southwest gains access to Korean travelers via Air Premia interline and offers flexible payments via Klarna, expanding customer reach.
KLAR · Demand · Positive Klarna's payment services are adopted by Southwest, expanding its merchant network and transaction volume.
Air Premia · Demand · Positive Air Premia's interline partnership with Southwest extends its network to over 120 U.S. destinations, enhancing its product for Korean travelers.
Boeing Nears FAA Approval for 737 Max 7 and Max 10 Engine Fix
Boeing is nearing FAA approval for a redesigned engine anti-ice system that could finally clear the 737 Max 7 and Max 10 for commercial service. The fix is in the final stages of certification, according to Reuters. Boeing has already built about 30 Max 7 jets and 9 Max 10s awaiting delivery, while the Max 10 has completed roughly 98% of its certification flight-testing program. The Max 10 represents more than 25% of Boeing's remaining 737 Max backlog, and approval could unlock years-delayed deliveries and support cash flow. Southwest Airlines is the largest Max 7 customer.
Jim Cramer Says Southwest Airlines Has Become More Disciplined
Jim Cramer said on Mad Money that Southwest Airlines has become more disciplined and is a terrific turnaround story. He noted that the low-cost carrier has been operating much more efficiently since activist Elliott Investment Management got involved in the summer of 2024. Southwest's stock has fallen about 25% in less than two months and is trading at less than 15 times this year's earnings estimates, even though earnings are expected to more than triple. Cramer pointed out that earnings estimates have already come down from over $4 per share to $2.86 per share, which is still more than three times last year's earnings. He also speculated that if big airlines are eager to consolidate, they might want to own Southwest.
LUV · Capital · Positive Cramer calls it a terrific turnaround story with disciplined operations and activist involvement, and notes low valuation and potential M&A interest.
Elliott Investment Management L.P. · Capital · Positive Elliott's involvement is credited with improving Southwest's efficiency, which could benefit its investment.
Southwest Airlines Stock May Trade At A Premium To Fair Value
Southwest Airlines stock may trade at a premium to fair value after a 50.2% return over the past year. The stock currently trades at a P/E of about 30.1 times, compared with an industry average of 10.1 times and a peer average of 23.2 times, and passes only 2 of 6 valuation checks on Simply Wall St's scorecard. Morgan Stanley's upgrade tied to assigned seating and new add-on services supports higher revenue assumptions, but the current P/E already reflects a fair amount of confidence in the earnings outlook. Simply Wall St's tailored fair P/E for Southwest Airlines is 28.4 times, suggesting investors are paying a modest premium. Community views are split, with a bull case seeing the stock as 16% undervalued and a bear case arguing it is 6% overvalued.
BofA sees Delta, United entering a rare airline sweet spot
Bank of America has raised price targets across the airline sector, citing steady demand, stronger fares, and reduced fuel costs that may support greater profitability into second-quarter results. The brokerage lifted its target for Delta Air Lines to $100 from $93 and for United Airlines Holdings to $150 from $145, while also boosting objectives on American Airlines, Southwest, Alaska Air, JetBlue, Frontier, and Allegiant. BofA now expects Delta's second-quarter unit revenue growth of 13.4% and third-quarter unit sales growth of 14.7%, with adjusted diluted EPS for 2026 estimated at $6.50, the low end of Delta's guidance range. For United, the firm projects second-quarter unit revenue growth of 13.5% and third-quarter growth of 15.6%, raising its 2026 EPS forecast to $11.15. The call is supported by airfare data showing a 26.7% year-over-year surge in May and a 15% increase in travel agency ticket sales, while jet fuel prices have declined roughly 35% from early April highs. However, BofA warns that domestic capacity is expected to rise 3.9% in October and 6.9% in November, which could erode unit-revenue gains if airlines do not remain disciplined.
DAL · Capital · Positive BofA raised price target to $100 from $93, citing steady demand, stronger fares, and reduced fuel costs; also provided EPS estimates.
UAL · Capital · Positive BofA raised price target for United to $150 and increased EPS forecast, supported by demand and lower fuel costs.
AAL · Capital · Positive BofA raised price target for American Airlines, citing steady demand, stronger fares, and reduced fuel costs.
ALGT · Capital · Positive BofA raised price target for Allegiant, citing steady demand, stronger fares, and reduced fuel costs.
ALK · Capital · Positive BofA raised price target for Alaska Air, citing steady demand, stronger fares, and reduced fuel costs.
JBLU · Capital · Positive BofA raised price target for JetBlue, citing steady demand, stronger fares, and reduced fuel costs.
Goldman, TD Cowen Raise Price Targets on Major U.S. Airlines
Goldman Sachs and TD Cowen raised price targets on several major U.S. airlines, citing stronger revenue trends and a 21% drop in fuel costs over the past month. Goldman lifted its targets on Delta to $116, United to $162, Alaska to $69, American to $15, and JetBlue to $4.50, while TD Cowen raised its targets on American to $24 and Southwest to $53. The two firms diverge on American Airlines, with Goldman maintaining a Sell rating at a $15 target below the current price around $18, and TD Cowen keeping a Buy rating with a $24 target. Delta and United reported strong first-quarter results, with Delta posting adjusted earnings per share of $0.64 on revenue of $14.2 billion and United guiding full-year 2026 earnings per share to between $7 and $11. The U.S. Global Jets ETF, which bundles these carriers, is up 18% year to date.
Goldman Sachs raised its outlook on the airline industry, lifting its third-quarter and fourth-quarter 2026 net income forecast by 24% and 32% respectively, citing strong demand and a better competitive environment after Spirit ceased service in May. Analyst Catherine O’Brien raised price targets for several carriers, including Allegiant by 14% to $142, Alaska Air by 19% to $69, American Airlines by 50% to $15, Delta by 45% to $116, JetBlue by 28% to $4.50, Southwest by 17%, and United by 24% to $162. However, O’Brien downgraded SkyWest to Neutral from Buy and cut its price target by 14% to $108, warning that lower-than-expected industry capacity growth increases downside risk to SkyWest’s block hour production. She lowered her 2026 block hour growth forecast for SkyWest to 3.0% from 3.5% previously, and from 4.9% earlier this year, calling it a significant deceleration from recent years.
SKYW · Demand · Negative Downgraded to Neutral with price target cut 14% due to lower block hour growth forecast, indicating reduced demand for its services.
AAL · Demand · Positive Goldman Sachs raised price target by 50% to $15, citing strong demand and better competitive environment after Spirit ceased service.
ALGT · Demand · Positive Goldman Sachs raised price target by 14% to $142, citing strong demand and better competitive environment.
ALK · Demand · Positive Goldman Sachs raised price target by 19% to $69, citing strong demand and better competitive environment.
DAL · Demand · Positive Goldman Sachs raised price target by 45% to $116, citing strong demand and better competitive environment.
JBLU · Demand · Positive Goldman Sachs raised price target by 28% to $4.50, citing strong demand and better competitive environment.
Southwest Airlines is set to report fiscal second-quarter 2026 earnings, with analysts expecting a profit of $0.50 per share, up 16.3% from $0.43 per share in the same quarter last year. The company has beaten or met earnings estimates in three of the past four quarters. For the full fiscal year ending in December, analysts forecast earnings of $2.93 per share, a 215.1% jump from $0.93 per share in fiscal 2025. Southwest shares have surged 58.5% over the past 52 weeks, far outpacing the S&P 500's 20.9% gain and the State Street Industrial Select Sector SPDR ETF's 25.6% return. Wall Street holds a Moderate Buy consensus on the stock, with 10 of 24 analysts rating it a Strong Buy and a Street-high price target of $65 implying 26.4% upside from current levels.
Air Fares May Not Fall Until September Despite Lower Oil Prices After Trump’s Iran Deal
Airline fares are unlikely to drop significantly until fall despite a decline in oil prices following the Iran agreement, according to GasBuddy analyst Patrick De Haan. De Haan said airlines optimized capacity for high fuel prices and summer demand, so only a few deals on less utilized routes are expected, with a full drop in fares not coming until demand falls in mid-to-late August and more so in the fall when capacity exceeds demand. He noted that some international flights have already seen price drops, with fares from Chicago to Italy falling from over $1,200 to under $800. Analysts have also pointed to strong demand and the recent collapse of Spirit Aviation Holdings as factors keeping ticket prices elevated, while shipping costs have surged due to uncertainty around the Strait of Hormuz. Oil prices fell on Thursday, with West Texas Intermediate crude below $70 at $69.87 per barrel and Brent crude at $72.98 per barrel, while jet fuel cost $2.83 per gallon and the national average for gas was $3.918 per gallon.
Southwest flies first aircraft equipped with Starlink inflight Wi-Fi
Southwest Airlines flew its first aircraft equipped with Starlink inflight Wi-Fi connectivity on June 22 on a flight between Dallas and Albuquerque. Chief Customer and Brand Officer Tony Roach said the ultra-fast Wi-Fi brings an at-home experience to the air. Southwest announced a partnership with Starlink in February to rapidly integrate the service into its fleet, with plans to make it available on 300 aircraft by the end of 2026. The carrier more recently said it will use a mix of low-Earth-orbit providers for its remaining fleet, suggesting it could tap Amazon, Viasat, and other smaller names. Shares of Gogo, a broadband provider to the aviation industry, have lost more than 80% of their value since the beginning of the year and fell another 2% on Thursday to a five-year low amid the proliferation of Starlink Wi-Fi across domestic carriers.
GOGO · Competition · Negative Gogo shares fell 2% to a five-year low as Starlink's proliferation across domestic carriers threatens its broadband business.
LUV · Technology · Positive Southwest flew its first Starlink-equipped aircraft, enhancing inflight Wi-Fi experience as part of its fleet modernization.
SPCX · Demand · Positive SpaceX's Starlink is being rapidly integrated into Southwest's fleet, with 300 aircraft planned by end of 2026, driving demand for its service.
Jet Fuel Prices Are Crashing, and These Airline Stocks Could Benefit Most
UBS said U.S. airline stocks are likely to shift back toward company-specific fundamentals after a macro-driven rally, as jet fuel prices fell 13% over three sessions and are about 40% below April peaks. The bank flagged a valuation gap between Delta Air Lines and United Airlines, noting Delta trades at more than twice United's 2027 earnings multiple, and said that spread could narrow if United's valuation improves while lower fuel prices support earnings. For more direct fuel exposure, UBS pointed to Alaska Air Group and American Airlines Group, estimating that a 10-cent drop in fuel prices would lift 2027 earnings per share by 13% for Alaska and 16% for American, versus smaller gains for Delta, United and Southwest Airlines. UBS kept Buy ratings on Delta, United, American and Alaska, while warning that higher valuations will likely require revenue strength, not just cheaper fuel.
AAL · Supply · Positive Jet fuel prices dropped 40% from April peaks; UBS estimates a 10-cent drop lifts 2027 EPS by 16% for American.
ALK · Supply · Positive Jet fuel prices dropped 40% from April peaks; UBS estimates a 10-cent drop lifts 2027 EPS by 13% for Alaska.
DAL · Supply · Positive Jet fuel prices dropped 40% from April peaks; UBS notes Delta trades at higher multiple but also benefits from lower fuel costs.
UAL · Supply · Positive Jet fuel prices dropped 40% from April peaks; UBS flags valuation gap with Delta and says lower fuel supports United's earnings.
LUV · Supply · Positive Jet fuel prices dropped 40% from April peaks; UBS mentions Southwest benefits from lower fuel, though less than Alaska/American.
PR Newswire Highlights 13 Major Press Releases From the Week
PR Newswire released its weekly roundup of notable press releases for June 15-19, 2026, featuring 13 stories spanning media, education, retail, aviation, technology, food, healthcare, consumer goods, pharmaceuticals, defense, lifestyle, and transportation. Fox Corporation announced a deal to acquire Roku for $160.00 per share in a cash-and-stock transaction valuing Roku at approximately $22 billion in enterprise value. U.S. News unveiled its 2026-2027 Best Global Universities Rankings, while Urban Outfitters debuted its second annual Pride vinyl collection with 12 limited-edition releases from artists including Reneé Rapp and Kesha. United Airlines introduced a custom “Stars and Stripes” livery on Boeing 787-10 and 737-800 aircraft and marked a military pilot hiring milestone. SandboxAQ signed a definitive agreement with the U.S. Department of Commerce for a $500 million CHIPS R&D award to develop novel molecules and formulations for semiconductor manufacturing. McDonald’s announced the limited-time return of its Fried Apple Pie starting June 23. LifeNet Health, NASA, and UNOS completed a first-of-its-kind drone kidney transport study with preliminary findings showing no negative effects on the organs. Crayola introduced an ‘All Grown Up’ adult coloring line with alcohol-based markers, acrylic paint markers, and artist-designed coloring books. Lilly acquired 4E Therapeutics to advance a non-opioid approach to chronic pain. Lockheed Martin and GM Defense are collaborating to strengthen the U.S. manufacturing and defense industrial base. Wildlife conservationist Robert Irwin became the new face of The Lad Collective bedding brand. Southwest Airlines partnered with Amazon Web Services to accelerate AI capabilities and transition to a cloud-based architecture by 2028. Life360 and Uber partnered to help parents coordinate rides for teens.
Trump Administration Clears Delta in CrowdStrike Outage Probe
The Trump administration has closed a federal investigation into Delta Air Lines' handling of the CrowdStrike-related outage without taking enforcement action. The U.S. Department of Transportation said on Monday it had concluded its review of Delta's response to the July 2024 technology meltdown, sparing the carrier from penalties despite disruptions that affected more than 1.3 million travelers and cost the company an estimated $500 million. The investigation was launched under the Biden administration after Delta took significantly longer than other major U.S. carriers to recover from the global software outage triggered by cybersecurity firm CrowdStrike. The review found that Delta provided prompt refunds, baggage assistance, and appropriate support for passengers with disabilities during the crisis. The decision was made in November but disclosed publicly on Monday, as the Trump administration has scaled back several aviation consumer-protection actions initiated during Biden's tenure, including waiving an $11 million penalty against Southwest Airlines and $16.7 million in penalties against American Airlines.
DAL · Regulation · Positive Delta cleared of penalties in federal investigation into its handling of the CrowdStrike outage, avoiding enforcement action.
AAL · Regulation · Negative Article mentions Trump administration waived $16.7M penalty against American Airlines, but the context is that the administration is scaling back consumer protections, which could be seen as negative for future regulatory oversight.
LUV · Regulation · Negative Article mentions Trump administration waived an $11M penalty against Southwest, but the context is scaling back consumer protections, which could be seen as negative for future regulatory oversight.
Southwest Airlines partners with AWS to become a fully cloud-based, AI-enabled airline by 2028
Southwest Airlines is partnering with Amazon Web Services to modernize its technology architecture and become a fully cloud-based, AI-enabled airline by 2028. The carrier will move away from a largely on-premises environment, adopting tools such as AWS Kiro, an AI-powered integrated development environment, and Quick, an AI assistant and agentic workspace, to shorten development cycles, automate testing, and streamline cloud infrastructure creation. The transition aims to provide greater speed, flexibility, and reliability across operations that support more than 70,000 employees and 134 million travelers. AWS Vice President of Agentic AI Swami Sivasubramanian said the collaboration will deliver real, measurable results at scale by deploying AI agents across customer experience, operations, and software development.
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