Southwest Airlines’ profit dropped 42% in the first nine months of 2025 compared to 2024, but its stock has surged by nearly 24% this year, outperforming Delta and United Airlines. Analysts and investors are optimistic about Southwest’s transformation to a more competitive airline model, driving its stock to a 2½ year high.

Starting in January, Southwest Airlines will switch from open seating to assigned seats on its all-Boeing 737 fleet, with extra legroom seats available for a fee. The company forecasts that this change could generate $1 billion in pretax earnings in 2026 and $1.5 billion in 2027. Analysts expect earnings to exceed $4 per share next year and surpass $6 per share in 2027.

Southwest Airlines recently ended its policy of two free checked bags for customers and introduced basic economy fares. The airline, like others, had to lower its profit forecast for 2025 due to factors such as President Donald Trump’s tariffs and the government shutdown earlier this year. Southwest typically provides its yearly outlook in late January alongside previous year’s earnings.

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3. Facebook faces backlash over whistleblower’s allegations of prioritizing profits over user safety. Former employee Frances Haugen accuses the social media giant of knowingly promoting harmful content and calls for greater regulation to protect users from the platform’s negative impact.: Southwest stock is up more than any other U.S. airline in 2025