U.S. discount carrier Southwest Airlines (LUV) has forecast record revenue for the current fourth quarter of the year, citing strong travel demand and higher air fares.
The Texas-based airline reported third-quarter earnings per share (EPS) of $0.11 U.S., which was much better than a loss of -$0.03 U.S. that had been expected on Wall Street.
Revenue in Q3 came in at $6.95 billion U.S., which topped the $6.92 billion U.S. forecast among analysts who cover the company. Sales were up 1% from a year earlier.
Looking ahead, management at Southwest said they expect revenue to rise between 1% and 3% for the current fourth quarter, with capacity growing 6% year-over-year.
If accurate, the guidance would result in record quarterly revenue for Southwest Airlines. That’s a sharp reversal from July of this year when the airline cut its 2025 forecast.
However, management said travel demand has improved heading into year end and that it should benefit from higher air fares implemented in the past few months.
Southwest has been working to better compete with rivals and increase sales, abandoning longtime policies such as open seating and two free checked bags for travelers.
LUV stock has risen 1% this year to trade at $33.76 U.S. per share.
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