Southwest's profits are down 42% this year but it's the top U.S. airline stock

Core Insights - Southwest Airlines' profits decreased by 42% in the first nine months of 2024 compared to the same period in 2023, yet its stock has increased nearly 24% in 2025, outperforming other U.S. passenger carriers [1][2] - The stock reached a two-and-a-half year high this week, driven by expectations for the airline's transformation to align more closely with larger competitors [2] - Analysts attribute the stock's performance to strategic initiatives rather than the overall demand environment, which has not positively impacted other airline stocks [2] Financial Performance - Profit decline of 42% in the first nine months of 2024 compared to the same period in 2023 [1] - Stock price increase of nearly 24% in 2025, the highest among U.S. passenger carriers [1] Market Position - Southwest Airlines is undergoing a transformation to become more competitive with larger rivals [2] - The stock's recent performance is not reflective of the broader demand environment affecting other airlines [2] Analyst Perspectives - Savanthi Syth, an airline analyst at Raymond James, emphasizes that the stock's rise is due to initiatives rather than market demand [2]