Southwest Airlines (LUV) FY2025 results: revenue $28.1 billion, up 2.1% on the year

Southwest runs a scheduled passenger airline in the United States and nearby international markets. It started flying on 18 June 1971 with three Boeing 737s serving Dallas, Houston and San Antonio. At the end of 2025 it had 803 Boeing 737s and served 117 destinations in 42 states, the District of Columbia, Puerto Rico, and ten countries nearby: Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands and Turks and Caicos.

The route network

In 2025, 74 percent of customers flew nonstop, across 871 nonstop city pairs, with an average stage length of 780 miles and an average trip of 2.1 hours. Service was announced at five new places for 2026: St. Thomas, Knoxville, Anchorage, Santa Rosa in California and St. Maarten. During 2025 the airline cut short-haul flying and moved resources to longer-haul routes, reduced weekday and off-peak flying where demand was lower, cut service substantially at Atlanta and Fort Lauderdale and expanded at Nashville and San Diego. It also launched partnerships with six international airlines to connect its domestic network to more global destinations.

The cost model

The low-cost approach rests on the route structure, including service to secondary or downtown airports such as Dallas Love Field, Houston Hobby, Chicago Midway, Baltimore-Washington, Burbank, Oakland and San Jose, typically less congested than other airlines' hubs, which lets aircraft spend less time on the ground. A single aircraft type, the Boeing 737, simplifies scheduling, maintenance, flight operations, safety management and training. In 2025 asset use was raised by introducing overnight flights and by cutting the time needed to turn an aircraft around.

What changed in 2025 and 2026

From 27 January 2026 Southwest began assigned and extra legroom seating, so a passenger chooses between a standard seat, a preferred seat near the front, or extra legroom, and the boarding model was redesigned to group customers by seat location, fare bundle and loyalty status. In 2025 the fare structure was rebuilt: a Basic fare replaced Wanna Get Away, and Choice, Choice Preferred and Choice Extra replaced Wanna Get Away Plus, Anytime and Business Select. For flights booked or changed on or after 28 May 2025 the airline introduced bag fees on most fares, keeping two free checked bags for A-List Preferred members and Choice Extra passengers and one for A-List members and co-brand cardholders. Getaways by Southwest, an in-house holiday package product, launched in August 2025. Distribution widened to Expedia, Priceline, Google Flights, Kayak and Skyscanner.

Rapid Rewards

Points are earned on the fare amount multiplied by a multiplier set by fare type, from two points per dollar on Basic up to 14 on Choice Extra, the highest of the range. What a flight costs in points varies with destination, time, day, demand, fare type and redemption rate. Points do not expire, there are no blackout dates, every available seat on every flight can be booked with points, and points can also be spent on other airlines, cruises, hotels, car hire, gift cards and event tickets, or bought, gifted, transferred and donated. A-List status comes from 20 qualifying one-way flights or 35,000 tier qualifying points in a calendar year and A-List Preferred from 40 flights or 70,000 points, both bringing free Wi-Fi sponsored by T-Mobile, priority check-in, standby priority and a points bonus of 25 or 100 percent, while 100 flights or 135,000 points earns a Companion Pass, unlimited travel for a named companion free of charges besides taxes and fees. The programme also feeds the co-branded Chase Visa credit cards, the Rapid Rewards debit card and the hotel, car hire and other partnerships.

The order book

The fleet included 300 Boeing 737-8s at the end of 2025. Supplemental agreements with Boeing in the second and fourth quarters of 2025 rescheduled deliveries of the 737-7 and 737-8 to match the network and capacity plans, partly because of delivery delays, and included confidential credits and other concessions from Boeing. There were 465 firm MAX orders for delivery through 2031 and 152 options remaining at the year end. The 737-7 schedule depends on the Federal Aviation Administration certifying the aircraft, and the company offers no assurance on timing. It says it keeps flexibility on fleet size, including accelerating retirement of its 737-700s, and intends to keep selling aircraft where market conditions are favourable and replace most of them with new ones.

People

Approximately 84 percent of employees were represented by labour unions at the end of 2025. Under the Railway Labor Act an airline's collective bargaining agreements do not expire but become amendable on an agreed date, after which either side may call for negotiation, then federal mediation, then offered arbitration; if arbitration is refused a 30-day cooling-off period runs, after which either side may use self-help, meaning a strike or the imposition of terms and the hiring of replacement workers, unless a Presidential Emergency Board intervenes. All 12 union-represented workgroups have ratified new contracts since October 2022.

From Southwest's annual report on Form 10-K for the year ended 31 December 2025. The filing

Written from the 10-K filed 5 February 2026: read the full 10-K.