Southwest Airlines Fares Won’t Drop With Jet Fuel Prices, CEO Bob Jordan Tells Investors

Southwest CEO Bob Jordan told investors the airline will permanently keep fares high — even if oil prices crash. Here’s why that’s a watershed moment for every U.S. traveler.

Southwest Airlines CEO Bob Jordan told investors Wednesday the carrier will not roll back its fare increases even if jet fuel prices decline — a permanent shift in the airline’s pricing philosophy.

Jordan made the declaration at the Bernstein Strategic Decisions Conference in New York on May 28, one day after executives from American Airlines and United Airlines voiced similar confidence in sustained demand at the same event.

The announcement comes as U.S. carriers contend with a global jet fuel crisis triggered by the effective closure of the Strait of Hormuz following U.S. and Israeli military operations against Iran in February 2026. The disruption drove jet fuel prices up more than 120% from pre-conflict levels, reaching $1,838 per tonne in early April before stabilizing above $1,500 per tonne. U.S. airlines spent $5.06 billion on fuel in March alone — a 56.4% increase over February and 30% higher year-over-year, according to U.S. Department of Transportation data.

Southwest joined seven industry-wide fare increases since the end of February — the most Jordan said he had seen in his 38 years in the aviation industry. Despite those increases, the carrier has recorded no drop-off in demand across either its leisure or business travel segments.

“Across all points in the booking curve, the consumer remains very strong despite this rise in fares,” Jordan said. “So, I become increasingly bullish that we will be able to cover these fuel increases with revenue increases.”

Jordan said Southwest will “certainly not attempt to give some of these fare increases back,” adding that ticket prices are “just now catching up to the broader post-Covid rate of inflation” — a framing that positions the increases as a long-overdue pricing correction rather than a temporary fuel surcharge. He acknowledged, however, that current fare increases are not yet sufficient to fully cover the rise in fuel costs, meaning further increases would be needed if fuel prices remain elevated.

Southwest posted a $227 million first-quarter profit, reversing a $149 million loss in the same period a year earlier — a year-over-year swing of $376 million. The Dallas-based carrier reported record operating revenue of $7.249 billion in Q1 2026, up 12.8% year-over-year, as operating cash flow rose 65% to $1.418 billion. For the second quarter, Southwest guided earnings per share of $0.35 to $0.65, with unit revenues expected to grow 16.5% to 18.5% year-over-year — a pace management characterized as “industry-leading by a wide margin.”

“The financial results are moving in the right direction for our shareholders, and I think this is a durable and sustainable change in the airline,” Jordan said.

The collapse of Spirit Airlines has removed a significant source of pricing pressure from the domestic market. Spirit, the nation’s largest ultra-low-cost carrier, ceased all flight operations at 3:00 a.m. ET on May 2, with Bankruptcy Judge Sean Lane approving its liquidation on May 6. The shutdown eliminated approximately 17,000 direct and indirect jobs and removed roughly 4% of U.S. domestic seat capacity overnight.

Jordan credited Spirit’s exit as a structural tailwind enabling carriers to hold fare levels.

“You hate to see somebody go out of business, but with Spirit out of business, I think it helps that environment,” he said. “I do think the backdrop is constructive, when fuel drops, to retain the revenue and yield increases we’ve seen.”

A Business Insider analysis of domestic fare data from Cirium found that in roughly 90 routes where Spirit had previously exited the market between 2024 and 2025, airfares rose an average of about $19, or 14% — compared to a 6 to 7% increase on routes where Spirit continued operating, with prices rising in about 80% of those exit cases.

Jordan’s remarks echoed assessments delivered the prior day by the sector’s other major carriers. American Airlines CEO Robert Isom described demand as resilient despite higher fares, noting “there is a K-shaped aspect to demand right now” — meaning higher-income consumers continue traveling robustly even as budget travelers face more strain. Isom said “it is clear that, no matter what end of the spectrum you’re at, people want to travel.” American projected 2026 profitability comparable to its 2025 adjusted net income of $237 million, despite a sharply higher fuel bill, with corporate travel up 13% year-over-year as of late May. United Airlines CEO Scott Kirby separately described demand as “pretty strong” and noted a “pricing cleanup” had occurred in the market, while expressing optimism about achieving double-digit margins in 2027.

Southwest is simultaneously counting on new product revenue to sustain elevated yields. The carrier launched assigned seating and extra-legroom seats on Jan. 27, 2026, ending its 50-year open-seating model. The extra-legroom seats — positioned at the front of Boeing 737 MAX 8 and 737-800 cabins and in exit rows — offer up to five additional inches of legroom. Jordan said those products “are already delivering results” for the carrier.

The broader fuel crisis has prompted global airlines to cancel thousands of flights and remove nearly two million seats from May 2026 schedules alone. Morgan Lewis aviation analysts have described the crisis as exposing “deep vulnerabilities in the aviation industry that analysts, regulators and airlines say could persist long after disruptions in the Strait of Hormuz ease.”