Southwest Airlines Shares Surge 5.47% on $270M Volume Spike as Q2 Earnings Miss Forecasts Stock Ranks 398th in Market Activity

Southwest Airlines (LUV) surged 5.47% on Aug. 22, with a trading volume of $270 million—a 81.51% increase from the previous day—ranking 398th in market activity. The stock’s performance followed a mixed earnings report for Q2 2025, where both revenue and profits fell short of expectations. Earnings per share came in at $0.43, missing the Zacks Consensus Estimate of $0.51 and declining 25.9% year-over-year. Revenue of $7.24 billion also lagged the $7.29 billion forecast, with passenger revenue dropping 1.3% to $6.62 billion amid weaker demand.

Operational metrics highlighted challenges in unit economics. Revenue per available seat mile (RASM) fell 3.1% to 15.41 cents, while passenger revenue per available seat mile (PRASM) declined 2.8% to 14.10 cents. Traffic measured in revenue passenger miles dipped 3.5% to 36.88 billion, outpaced by a 1.6% rise in capacity, leading to a 4.1-point drop in load factor to 78.5%. Adjusted operating expenses grew 6.4%, though fuel costs per gallon fell 15.9% to $2.32. The carrier ended the quarter with $3.47 billion in cash, down from $8.13 billion in the prior period.

Liquidity and governance developments added context. Southwest reduced its cash reserves significantly, while long-term debt remained flat at $4.08 billion. Corporate governance changes included the appointment of Doug Brooks as board chairperson. Strategic partnerships, such as with Priceline for direct fare bookings, and new service launches in Knoxville and St. Thomas, USVI, were cited as operational updates. However, these moves contrasted with a decision to step back from sustainable aviation fuel (SAF) production, transferring the SAFFiRE initiative to Conestoga.

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