Now, Southwest Airlines (LUV 5.88%) took a bit of a tumble today, didn’t it? A proper dip, like a clumsy penguin sliding into a freezing pond. But don’t go blaming the nice folks at Southwest. Oh no, this wasn’t their doing. The trouble, you see, started with a rather grumpy fellow over at United Airlines (UAL 3.27%).
United’s CEO Sounds the Alarm
This Scott Kirby, the CEO of United, had a bit of a moan at Harvard, you see. He was flapping his arms about oil prices, which have shot up like rockets since all the bother in the Middle East. He says it’ll cause a right mess with United’s numbers for the first bit of the year. (United’s stock is down too, a measly 3.3%, but still…down.)
It stands to reason, of course, that other airlines might feel a pinch. It’s like a swarm of particularly nasty biting flies – if one gets bitten, they all get bitten. Oil’s gone up 36% since the bombs began to fall, according to some clever folks at OilPrice.com, and a barrel of the stuff is nearly at $93. Worse still, jet fuel has jumped a whopping 58% – a monstrous $3.95 a gallon! Fuel is, generally speaking, the second biggest cost for keeping these metal birds in the air. If it’s causing United a headache, it’ll certainly give Southwest one too.
What Does This Mean for Southwest Stock?
Now, a tiny bit of good news, if you can call it that. Southwest mostly flies folks around inside the country, so they don’t have to worry about passengers cancelling flights to avoid a war zone. A rather sensible arrangement, wouldn’t you say? CNBC tells us some 25,000 flights through the Mideast have already been cancelled, which is a truly enormous number of empty seats.
United’s CEO says demand hasn’t been a problem for them yet, either. Revenue’s up 20% in the first bit of the year, and Kirby claims his airline “hasn’t taken even a tiny step back” on that front. Hmm. A week into a proper kerfuffle, I wouldn’t wager my best shilling on that lasting. But at least it’s one less thing for Southwest investors to fret about. For now.
The situation, you see, is a bit like a wobbly tower of gingerbread. Everything looks fine, but a single gust of wind – or a sudden spike in oil prices – and the whole thing could come tumbling down. It’s a reminder that even the most carefully constructed financial forecasts can be undone by events entirely beyond anyone’s control. And that, my friends, is a lesson worth remembering.
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2026-03-06 23:03