Southwest Airlines for the second straight quarter set a new record for managed corporate revenue, with executives on a Thursday morning earnings call citing the new initiatives the carrier has put in place over the past year or so.
"Managed business revenue grew 30 percent year over year to a new all-time quarterly record, surpassing the record established just one quarter ago," president and CEO Bob Jordan said. To see that increase "on basically flat capacity to me is just incredible," he added.
Southwest chief commercial officer Justin Jones said that "overall, we are super impressed with the adoption of our new products by our corporate customers," he said. "Not only are we seeing substantial growth on our year-over-year basis but nominal load factor points and our total mix of [origins and destinations] is all up, so every metric we're looking at is looking good."
Jones also noted Southwest has "some pretty significant disadvantages" in gaining corporate revenue and share, particularly offering ancillary products through channels popular with business travelers.
Still, he said, there are "a lot of tactical things" the carrier can do, including shifting capacity to "offer a much better network product to our customers. ... As we improved the network, our corporate load factors are going up."
Meanwhile, new Rapid Rewards loyalty program membership in Q2 increased 35 percent year over year, and credit card acquisitions were up 28 percent, executives said.
Those increases are because "the product changes we put in place are resonating across the board with customers and with customers we are now gaining," Jordan said.
Southwest earlier this year implemented assigned and extra-legroom seating, which necessitated a new boarding procedure. These changes were on top of several others for the carrier in 2025, including charging for bags, adding international partners and adding a basic economy fare.
Jordan added that the momentum from the second quarter has continued into the third. "The third quarter I think is booked about 65 percent in place, and yields are running up 24 percent year over year compared to 13 percent for Q2 at this point," he said. "There is no deceleration in the strength in the demand and no deceleration in the strength of the revenues and the fares."
Southwest Q2 Metrics
Southwest reported second-quarter passenger revenue of more than $7.7 billion, a nearly 17 percent increase year over year. Total operating revenue was more than $8.4 billion, up more than 16 percent on relatively flat capacity (0.2 percent growth).
Net income for Q2 was $233 million, up from $213 million reported a year prior.
Second-quarter average fuel costs were $3.92 per gallon, below prior estimates of $4.10 to $4.15 per gallon, but Southwest still incurred a record fuel expense of more than $2.2 billion, which was $889 million higher than what was reported in Q2 2025, Jordan said.
Projected third-quarter fuel cost is $3.70 to $3.75 per gallon, while capacity changes are estimated to be minus 1 percent to flat year over year.
RELATED: Southwest Q1 performance