Improvements in the demand environment observed by Southwest Airlines in July continued through the rest of the third quarter and into the last three months of the year, allaying fears that market weakness would endure.
The US carrier made that observation as it outlined its third-quarter earnings on 23 October, in a US market that had earlier in the year been concerned about the impact of economic uncertainty on consumer and corporate spending, particularly following the government’s tariff announcements.
“This improving demand environment, combined with the successful execution of strategic initiatives, drove record third-quarter revenue performance,” Southwest says, referencing its continuing effort to turn the business’s fortunes around with a wholesale rethink of its product offering.
As that effort continues, Southwest chief executive Bob Jordan states: “We are pleased with our initiative performance, which will continue to ramp into the fourth quarter and next year; and while early, indicators for our new assigned and extra-legroom seating products are in line with expectations.
“We are encouraged by our momentum and confident in our direction.”
The Dallas-based operator’s $6.9 billion in revenue for the third quarter was up 1% year on year, helping it to an operating profit of $35 million, which was down $3 million year on year. Its net profit of $54 million was down $13 million from the same three months of 2024.
Southwest notes that unit revenues, unit costs and net income all “exceeded expectations” in the quarter and that “strong execution” is continuing “across the business”.
Southwest expects to record “an all-time quarterly record revenue performance” in the fourth quarter, it says, based on current market conditions.
