Southwest stock rose more than any other US airline in 2025

Southwest AirlinesIts profits were down 42% in the first nine months of the year compared to the same period in 2024. But its shares have been on a tear.

Southwest shares are up nearly 24% so far in 2025, more than any other U.S. passenger carrier. Industry earnings leaders Delta Airlines and United Airlines It’s up about 17% all this year.

Southwest stock this week reached its highest level in two and a half years. Analysts and investors have high hopes for the airline next year, when it completes its planned transformation from a one-size-fits-all airline into one that looks more like its larger rivals.

“Clearly what is helping Southwest stocks are initiatives, not… [demand] “If that’s the case, you’ll see it in all the other stocks as well,” said Savanthi Seth, airline analyst at Raymond James.

Starting January 27, Southwest is ditching open seating and moving to assigned seating throughout.Boeing 737 fleet. The first rows of seats have additional legroom – for a fee. Seat prices vary, but, for example, a flight from Baltimore to Las Vegas in early February showed seat prices at about $80 each way.

Southwest predicted in October that assigned seats and seats with extra legroom could generate $1 billion in pretax profit next year and $1.5 billion in pretax profit in 2027.

“Because the custom seating, the extra legroom, goes a long way, of course. [results are] “It’s going to be better year over year,” Southwest CEO Bob Jordan told CNBC on Dec. 10. “The bookings we are seeing reflect the business case for assigned seating and extra legroom.”

Barclays upgraded Southwest shares earlier this month, with transportation analyst Brandon Oglinski predicting Southwest’s adjusted earnings will be above $4 per share next year and exceed $6 per share in 2027.

The end of the cattle call boarding lineup comes months after the Dallas carrier eliminated another decades-old policy: two free checked bags for customers. It also began selling the first-ever no-frills basic economy fares.

Southwest, like other airlines, cut its 2025 earnings forecast after demand fell early this year as President Donald Trump’s tariffs and cost-cutting in Washington weighed on bookings. More recently, the government shutdown that ended last month hurt demand, prompting Southwest to cut its earnings forecast for this year again.

Southwest typically presents its annual forecasts along with the previous year’s earnings in late January.