Southwest is charging more per trip through bag fees, seat choices and richer fares, and its third-quarter 2026 profit jumped. Yet from January to September 2026, spending on aircraft and other assets used up almost all its operating cash.
A checked suitcase now costs extra on a Southwest flight, and so does a seat with more legroom. These small charges sit at the center of a big change at Southwest Airlines, a US airline that flies almost entirely within North America. You may well have flown with it. It earns mainly from tickets, from a growing list of paid extras and from Rapid Rewards, its loyalty program, whose members collect points and redeem them for flights.
Passengers pay for a seat and, more and more, for the choices around it: a fare bundle with more benefits, a checked bag, early boarding or an assigned seat. Beyond those flights, the loyalty program earns from a credit card carrying Southwest's name and from partner contracts. Three costs matter most: staff, jet fuel and aircraft. Most employees belong to unions, so pay follows negotiated contracts that are slow to reopen. In 2025 the airline stopped locking in fuel prices in advance, so fuel costs now move with the market. With costs this rigid, what the airline keeps depends on the price of each seat rather than the number of seats.
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