SOUTHWEST AIRLINES Business Summary

Southwest Airlines Co. (LUV) operates a transaction-based business model primarily generating revenue through passenger ticket sales, which accounted for approximately 91% of its record $28.1 billion in 2025 revenue. The company’s primary business segments are categorized by its extensive domestic U.S. network and a growing international presence in Mexico, Central America, and the Caribbean. Historically defined by its low-cost carrier (LCC) roots and point-to-point service, Southwest is currently executing a radical strategic pivot to capture high-yield business and premium-leisure travelers. This transformation includes the January 2026 retirement of its iconic open-seating policy in favor of assigned seating, the introduction of "Even More Room" premium cabin sections, and the implementation of new ancillary revenue streams such as checked bag fees and basic economy fares. Southwest competes directly with legacy giants Delta Air Lines, United Airlines, and American Airlines, as well as LCC rivals like JetBlue; it currently occupies a unique market position as a high-frequency hybrid carrier that leverages a competitive cost structure to challenge legacy premium offerings. Originally founded by Herb Kelleher and Rollin King in 1967, the airline is now led by President and CEO Bob Jordan, a 38-year company veteran who has spearheaded the most significant business model overhaul in the carrier's 55-year history. The executive team includes Chief Operating Officer Andrew Watterson, a former Hawaiian Airlines executive and U.S. Army veteran, and Executive Vice President and CFO Tom Doxey, who previously served as President of Breeze Airways. Technology modernization is directed by EVP and Chief Information Officer Lauren Woods, who was promoted to the role in late 2025 to oversee a multi-billion dollar IT infrastructure upgrade. The company’s governance is overseen by Independent Board Chair Doug Brooks. Notable institutional investors include The Vanguard Group and Primecap Management, while activist investor Elliott Investment Management remains a significant stakeholder with an approximate 9% position as of February 2026, following a period of intense engagement that resulted in a board downsizing to 11 members.