Southwest stock is up more than any other U.S. airline in 2025
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 | Getty Images
Southwest Airlines‘ profit fell by 42% in the first nine months of the year compared to the same period in 2024. But its shares are in decline.
Southwest’s shares are up nearly 24% so far in 2025; that’s more than any other U.S. passenger carrier. Industry profit leaders Delta Airlines And United Airlines each is up about 17% this year.
Southwest shares hit a 2.5-year high this week. Analysts and investors have high hopes for next year, when the airline will complete its planned transformation from a one-size-fits-all airline to one more similar to its larger rivals.
“It’s clearly not startups that are helping Southwest’s stock, but [demand] “Because if that were the case, you’d see that in other stocks as well,” said Savanthi Syth, an airline analyst at Raymond James.
Southwest Airlines shares compared to NYSE Arca Airline index
Starting January 27, Southwest is ditching open seating and switching to assigned seating.Boeing’s 737 fleet. Extra legroom is available in the first rows of seats for a fee. Seat prices vary, but for example, a flight from Baltimore to Las Vegas in early February found seats to be around $80 per way.
In October, Southwest estimated that assigned seating and seats with extra legroom could generate $1 billion in pre-tax earnings next year and $1.5 billion in pre-tax earnings in 2027.
“Because designated seating and extra legroom come into play, and of course that has a lot of value, [results are] It will get better year over year, Southwest CEO Bob Jordan told CNBC on Dec. 10. “The bookings we are seeing reflect the business case for assigned seating and extra legroom.”
While Barclays upgraded Southwest’s shares earlier this month, transportation analyst Brandon Oglenski predicts 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 carrier got rid of another decades-old policy: two free checked bags for customers. It also began selling no-frills basic economy tickets for the first time.
Like other airlines, Southwest cut its profit forecast for 2025 after demand collapsed earlier this year as President Donald Trump’s tariffs and cost cuts in Washington put pressure on bookings. More recently, the government shutdown that ended last month hurt demand, prompting Southwest to again lower its earnings outlook for this year.
Southwest usually presents its annual outlook as well as the previous year’s earnings in late January.
