United States airlines are continuing to wrestle with higher fuel bills amid the ongoing Iran war.
Southwest Airlines, for one, just reported that its quarterly fuel costs were elevated by almost $1 billion year over year.
The budget carrier said that in the second quarter of 2026, it saw an $889 million increase in nominal fuel costs compared to the same quarter in 2025.
Despite the significant headwind, the carrier earned a net income of $233 million in Q2, buoyed by record revenue.
The airline saw its highest-ever quarterly revenue in company history: $8.4 billion, which is 16.4% higher than in 2025.
Southwest executives credit the carrier’s strong demand and growing loyalty business for driving the strong profit.
“Momentum across managed business, Rapid Rewards, and our Chase co-branded credit card, together with continued robust demand for our enhanced product offering, reinforce the strong progress we are seeing across Southwest,” said Southwest CEO Bob Jordan.
Enrollments in the airline’s Rapid Rewards loyalty program increased 35% year-over-year.
Southwest was also named the number one airline for economy passengers in JD Power’s 2026 North America Airline Satisfaction Study.
Through the end of 2026, the airline is ready to handle higher fuel costs, Jordan said, by “continuing to optimize our network, product offering, and pricing, while continuing to strengthen financial performance.”
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