Southwest Airlines closed 2025 with net income of $441 million, or $0.79 per diluted share, and adjusted net income of $512 million, or $0.93 per diluted share. The airline delivered full-year adjusted EBIT of $574 million, exceeding its prior guidance of $500 million. Record operating revenues reached $28.1 billion for the year, including $7.4 billion in the fourth quarter, up 7.4% year-over-year. Fourth-quarter net income was $323 million ($0.61 per share), with adjusted net income of $301 million ($0.58 per share). The company returned $2.9 billion to shareholders through dividends and share repurchases in 2025.

During 2025 Southwest implemented its most ambitious business transformation to date, introducing bag fees, basic economy fares, assigned and extra-legroom seating, Rapid Rewards optimization, expanded online distribution partnerships, and free Wi-Fi for loyalty members. These initiatives, alongside new technology investments and rigorous cost reduction—surpassing the $370 million target—drove revenue upside and improved unit cost metrics. Full-year CASM-X rose just 3.1% despite capacity growth, supporting margin expansion.

Southwest forecasts adjusted EPS of at least $4.00 for full-year 2026, representing over 300% growth versus 2025. First-quarter adjusted EPS is expected to be at least $0.45. Capacity (ASMs) is projected to increase 2%–3% year-over-year in 2026, with unit revenues (RASM) up at least 9.5% in Q1 and operating expenses per ASM excluding fuel (CASM-X) rising around 3.5%. These forecasts assume continued momentum from product enhancements and strong leisure and business bookings.

Southwest ended 2025 with 803 aircraft after taking delivery of 55 Boeing 737-8s and retiring 55 older jets. Fourth-quarter capacity rose 5.8%, with network connectivity boosted by six new strategic airline partnerships and announced service to five additional cities. Turn times were reduced and redeye flights added to increase aircraft utilization. The company accrued $97 million of employee profit sharing for the year and closed 2025 with $3.2 billion in cash and equivalents, maintaining investment-grade leverage at 2.4x.