SOUTHWEST AIRLINES CO (LUV)

Southwest Airlines Co. operates Southwest Airlines, a major passenger airline providing scheduled air transportation in the United States and near-international markets. It began service on June 18, 1971, with three Boeing 737 aircraft serving Dallas, Houston, and San Antonio. As of December 31, 2025, it had 803 Boeing 737 aircraft and served 117 destinations in 42 states, the District of Columbia, Puerto Rico, and ten near-international countries, including Mexico, Jamaica, The Bahamas, Aruba, and the Dominican Republic. The company is carrying out several transformation initiatives, including assigned and extra legroom seating and a redesigned boarding model (both starting January 27, 2026), partnerships with international airlines, 24-hour operations with redeye flights, and expansion into online travel distribution channels.

Its products include four fare bundles: Basic, Choice, Choice Preferred, and Choice Extra. These carry different levels of flexibility, seat selection, boarding priority, and loyalty points. Bag fees were introduced for most fares for tickets booked on or after May 28, 2025. Ancillary services include Priority Boarding, pet transport, and unaccompanied minor service. In August 2025 the company launched Getaways by Southwest, an in-house vacation package product. Its Rapid Rewards loyalty program lets members earn points on fares, through partners, and through co-branded Chase Visa cards and a debit card. Points do not expire and can be redeemed on every available seat. The program includes A-List and A-List Preferred tier status and a Companion Pass.

Southwest serves leisure and business travelers across the U.S. and near-international destinations, and it has recently expanded sales through Expedia, Priceline, Google Flights, Kayak, and Skyscanner. It also has a corporate travel channel. In 2025, 74% of customers flew nonstop, with 871 nonstop city pairs, an average stage length of 780 miles, and an average trip duration of 2.1 hours. Service to five new locations was announced for 2026, including St. Thomas, Knoxville, Anchorage, Santa Rosa, and St. Maarten. Southwest has also shifted toward longer-haul flying and reduced service in Atlanta and Fort Lauderdale while expanding in Nashville and San Diego.

Southwest primarily operates point-to-point service rather than hub-and-spoke, and has increasingly built its network around core stations. It uses many secondary or downtown airports, such as Dallas Love Field, Houston Hobby, Chicago Midway, and Baltimore-Washington International. Its fleet is a single aircraft type, the Boeing 737, which simplifies scheduling, maintenance, and training. It had 300 Boeing 737-8 aircraft at year-end 2025, with 465 firm MAX orders through 2031 and 152 options. Boeing 737-7 deliveries depend on FAA certification. Salaries, wages, and benefits were about 46.9% of 2025 operating expenses, and fuel and oil was the second-largest cost at 19.0%. The company terminated its remaining fuel hedging contracts in the second quarter of 2025. In February 2025 it cut about 1,750 roles, or 15% of corporate positions.