Southwest Posts Strong Q1, Cautions on Fuel in Q2 Outlook

Overview

• Southwest reported EPS of $0.45 with first‑quarter operating margin at 4.6% after an 8.1‑point expansion and operating cash flow up 65% to $1.4 billion.
• Management said demand stayed broad across the network and yields rose 11.6% year over year, with about half of the gain coming from customers choosing higher‑priced fares.
• The company guided second‑quarter EPS to $0.35–$0.65 and said jet‑fuel price swings and geopolitical risks make the near‑term outlook uncertain.
• Executives highlighted fleet flexibility after selling five older Boeing 737s with a roughly $30–$40 million book impact, noting a largely owned, unencumbered fleet allows quick capacity shifts.
• Southwest pointed to ongoing cost and product moves, including work with Starlink for in‑flight connectivity, and said recent softness in Mexico beach routes and Hawaii has begun to improve.