Southwest's stock flies to multiyear high. This analyst sees the airline set for even more profit.

Dow Jones01:56

MW Southwest's stock flies to multiyear high. This analyst sees the airline set for even more profit.

By Claudia Assis

The once no-frills carrier will reap the benefits of offering a 'full suite' of seating options, Barclays analys says

For many years, Southwest Airlines stuck with a one-size-fits-all approach that was out of sync with competitors.

Southwest Airlines' stock on Wednesday rode a wave of renewed optimism about U.S. airlines in the new year, including a prediction from Barclays that the once no-frills air carrier will be more profitable in 2026.

The stock $(LUV)$ is on pace to close at its highest level since June 8, 2022, and extend its winning streak to an unprecedented 12 sessions - amassing gains of more than 23% over that run.

Southwest will benefit from a "material upgrade" in its strategy next year, and as investors' concerns about potential market-share losses begin to fade, Barclays analyst Brandon Oglenski said in a note this week. Oglenski upgraded his rating on the stock to the equivalent of buy.

For many years, the airline stuck with a one-size-fits-all approach that became out of sync with competitors, who went deeper into tiered fares and charging for different services as a way to drum up more profits.

Last year, however, Southwest announced sweeping changes in the way it does business, including the end of its hallmark open-seating policy and no fees for checked luggage, despite blowback from customers.

It started charging bag fees earlier this year, while extra legroom and assigned seating options will go live in January.

"We expect the carrier to see material improvement in relative revenue generation, especially in early 2026," as the seating options become available, Oglenski wrote, adding that the next year is looking to be "materially more profitable."

Southwest will have to catch up with the likes of United Airlines $(UAL)$ and Delta Air Lines $(DAL)$, which have focused on well-heeled customers willing to pay more for premium services.

See also: Rich fliers are making United and Delta billions by buying premium perks

-Claudia Assis

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December 17, 2025 12:56 ET (17:56 GMT)

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Southwest's stock flies to multiyear high. This analyst sees the airline set for even more profit.

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