Southwest shipped jet fuel from Texas to California amid supply crunch
A Boeing 737 aircraft belonging to Southwest Airlines lands at Los Angeles International Airport after arriving from Chicago on March 7, 2026.
Kevin Carter | Getty Images
How volatile are fuel markets this year?
Southwest Airlines It chartered a ship this spring to send jet fuel from Texas to California, where prices are much higher and concerns are growing about supply, Chief Financial Officer Tom Doxey told CNBC. This was a first for the Dallas airline.
“It brought what felt like a week’s worth of supply to the West Coast at a time when the supply was most constrained, most at risk,” Doxey said.
The ship, which departed from Houston and passed through the Panama Canal, arrived in Los Angeles on May 28 and had about 12.6 million gallons on board, Southwest said. For context, Southwest used 564 million gallons of jet fuel in the last quarter.
The West Coast is much more dependent on imports than other parts of the country. Jet fuel prices have risen and become unstable since the United States and Israel struck Iran in February.
Southwest said Thursday that fuel expenses rose nearly $900 million in the second quarter from last year.
The airline said it waived the Jones Act, a 1920 law that requires shipments between U.S. ports to be transported on a U.S. ship, for the shipment to California. President Donald Trump waived this requirement in March due to rising fuel prices in the weeks following the start of the Iran war and subsequent disruptions to shipping in the Strait of Hormuz, an important channel.
Countries that restricted exports this year due to fear of fuel shortages intensified concerns about supply. A Southwest spokesman said those concerns have since subsided.
Jet fuel is airlines’ biggest expense after labor. Prices fell in late spring and early summer but rose again this month as tensions with Iran flared again.
Last week, United AirlinesThe airline, which operates more international flights than any other U.S. carrier, said it uses the latest available fuel prices in its quarterly forecasts because prices vary so much.
In its July 15 report, it said jet fuel rose $575 million in the third quarter alone, or adjusted earnings per share fell $1.12.
Over the past decade, U.S. airlines have abandoned fuel hedging measures that had helped them keep costs stable through futures contracts as the U.S. faced supply shortages and kept prices in check.
This time, carriers scaled back their capacity expansion plans, which helped raise fares. Airline executives said this month that despite higher fares, demand remains strong and that is likely to continue.
