Companies · LUV
Southwest Airlines
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Latest analysis
Updated Aug 12, 2026
Southwest Airlines refinances credit facility: $2B revolver replaces 2028 maturity with 2031 expiration, signals normalizing leverage capacity.
Southwest Airlines entered into a new $2 billion five-year revolving credit facility on August 10, 2026, replacing a prior credit agreement that would have expired in August 2028. The new facility carries an accordion feature allowing expansion to $3 billion, includes a Collateral Coverage Test requiring lien-free aircraft collateral at 1.25x commitment level, and imposes a Coverage Ratio covenant of 1.25:1 (with a one-time option to reduce to 0.80:1 for two quarters). Pricing ranges from 87.5 to 162.5 basis points over Term SOFR (floored at 100bp) depending on the company's Index Debt Rating. The structure signals Southwest's return to standard-market financing terms after post-pandemic constraints, though covenant tightness and aircraft lien requirements confirm lenders remain attentive to carrier liquidity and asset quality.
Tone: neutralRevenue
$28.1B
LUV 10-K · FY 2025
Employees
72,790
Revenue FY2024
$27.5B
Founded
1967
Profile
LUV 10-K Item 1 · Feb 5, 2026Southwest Airlines is a major U.S. passenger airline operating scheduled air transportation across domestic and near-international markets. The Company operates exclusively with Boeing 737 aircraft in a primarily point-to-point route structure and is executing a broad transformation of its commercial model, including the January 2026 introduction of assigned seating, extra legroom options, bag fees, and international airline partnerships.
Read filing description ↓ Collapse description ↑
Southwest Airlines Co. operates Southwest Airlines, a major passenger airline that provides scheduled air transportation in the United States and near-international markets. Southwest commenced service on June 18, 1971, with three Boeing 737 aircraft serving three Texas cities: Dallas, Houston, and San Antonio. Southwest's unique route network, competitive fares, and famous Hospitality continue to make the Company an attractive choice for Customers in cities across the United States and near-international destinations. As of December 31, 2025, Southwest had a total of 803 Boeing 737 aircraft in its fleet and served 117 destinations in 42 states, the District of Columbia, the Commonwealth of Puerto Rico, and ten near-international countries: Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. The Company primarily provides point-to-point service, enabling more direct nonstop routing than traditional hub-and-spoke competitors. Southwest's low-cost strategy includes service to secondary or downtown airports, a single aircraft type, and initiatives to reduce aircraft turn time and improve fuel efficiency. In 2025, the Company executed multiple transformational initiatives including assigned and extra legroom seating, a redesigned boarding model, launch of global airline partnerships with six international carriers, introduction of the Getaways by Southwest in-house vacation product, 24-hour redeye operations, new fare structures with bag fees, and expansion into online travel agency distribution channels including Expedia and Priceline.
Primary products
- Passenger air transportation
- Basic fare
- Choice fare
- Choice Preferred fare
- Choice Extra fare
- Rapid Rewards loyalty program
End markets
Geographies
Named customers
Named competitors
“The Company believes its cost structure has historically provided it with an advantage over many of its airline competitors by enabling it to charge competitive fares, and the Company remains focused on driving efficiencies to offset overall inflationary cost pressures.” Competitive position, as stated in the filing
Revenue commentary · FY 2025
Total operating revenues grew to $28.1 billion in 2025 from $27.5 billion in 2024, driven by record passenger revenue performance attributable to the May 2025 bag fee introduction and broader transformational commercial initiatives.
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