Southwest’s Q3: higher yield helps offset lower passenger numbers
Southwest Airlines' revenue passenger numbers contracted by 2.6% YoY.
Southwest Airlines has presented its Q3 2025 results, and while the airline highlighted record-breaking quarterly revenues, the carrier’s financial report showed that despite slightly growing capacity, it welcomed fewer passengers compared to the same quarter in 2024.
Bob Jordan, the President and Chief Executive Officer (CEO) of Southwest Airlines, reviewed the quarter’s results by noting that the airline has made significant progress with its transformation program, quickly implementing new products and enhancements.
Jordan said that its results backed up its progress, including a profitable Q3 2025, “with both unit revenues and unit costs performing better-than-anticipated.” The company is also reaffirming its full-year earnings before interest and taxes (EBIT) guidance – between $600 million and $800 million – and expects that its Q4 margins will expand.
“We are pleased with our initiative performance, which will continue to ramp into the fourth quarter and next year; and while early, indicators for our new assigned and extra legroom seating products are in line with expectations.”
The airline ended the quarter with a net profit of $54 million, or 19.4% lower than in Q3 2024. Operating revenues improved by 1.1% year-on-year (YoY) to $6.9 billion, with passenger revenues climbing to $6.3 billion, up 1% YoY.
Meanwhile, operating expenses, while benefiting from a 6.1% reduction in fuel-related expenses (excluding special items, fuel costs were down 7.3%), reached $6.9 billion, resulting in an operating profit of just $35 million.
During the quarter, Southwest Airlines’ revenue passengers carried and enplaned passengers, 34.5 million and 43.8 million, were down 2.6% and 2%, respectively, with capacity, measured in available seat miles (ASMs), growing – or being relatively flat, depending on one’s perspective – by 0.8% YoY. Load factors contracted by 1.4% YoY.
At the same time, flown seats, measured by using the “total number of seats available by aircraft type multiplied by the total trips flown by the same aircraft type during a particular period,” were down 0.8% YoY.
To note, Southwest Airlines’ fleet shrank by nine aircraft. During the quarter, it welcomed eight Boeing 737 MAX 8 aircraft, and retired 16 737 Next Generation (NG) jets: 15 737-700 and one 737-800, which was sold.
(I am aware that the difference between eight and 16 is eight, but the airline's report denoted that its aircraft fleet at the end of Q3 numbered 802 jets, while at the end of Q3 2024, it had 811 737s.)
While it has introduced new interiors into service, its 737 MAX 8s, which now offer additional extra legroom seats, still have the same cabin configuration that can welcome up to 175 passengers.
Rytis Beresnevicius
However, the average passenger fare in Q3 was $182.56, compared to the average ticket price of $175.97 in Q3 2024 (up 3.7% YoY), while yield per revenue passenger mile (RPM) was 17.36¢, an improvement of 2.1% YoY.
The nine-month difference is even higher, with the airline recording an average fare of $187.36 during the first nine months of 2025, compared to $176.34 during the corresponding period in 2024. Yield per RPM improved by 4.5%.
Passenger revenue yield per ASM (PRASM), measuring “passenger revenue production based on the total [ASMs] flown during a particular period,” was up only slightly, 0.2% compared to Q3 2024, while year-to-date (YTD) to September 30, it also improved by 0.2% YoY.
Lastly, RPM, indicating demand, was down 1% in Q3 and down 3.9% YTD to September when comparing to the same periods in 2024.
Southwest Airlines was the third major US carrier to report its quarterly results. Delta Air Lines, which was the first and reported that its ASMs, RPMs, and yields were up (PRASM was down 1% YoY).
United Airlines, which was second, finished the quarter with higher ASMs and RPMs, yet yield and PRASM were both down, as it welcomed 48.3 million passengers on board its aircraft during the quarter, an improvement of 6.2%.
American Airlines is set to report its Q3 2025 results later today.
Rytis Beresnevicius
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