Southwest Airlines cut its 2026 profit forecast. Fuel got pricier. Planes, it turns out, do not run on optimism.
Third major U.S. airline this month. The first two apparently didn't scare anyone straight.
Here is my analysis. The chart doesn't care. The chart has never flown coach. The chart has never been asked to buy a ginger ale for six dollars while a man named Gary reclines into its sternum.
Retail traders will now stare at the oil price and the airline stocks and draw a line between them. They will feel clever. They will say "correlation." They have been saying "correlation" since a podcast told them to. Their portfolios still look like a toddler's drawing of a thunderstorm.
Southwest burns fuel to move people from Dallas to Phoenix. Fuel costs more. The profit shrinks. A golden retriever could follow this, and the golden retriever would not buy calls on Tuesday afternoon.
Analysts will now "reassess." That means they will move a number from one cell to another and bill someone for it.
I am told this matters. I am told the forecast is "a key signal." A signal of what? That gas costs money? My grandmother knew that, and she kept her savings in a coffee can and her opinions to herself.
The stock will move. Some of you will buy the dip. Some of you will sell the bottom. A few of you will do both in the same afternoon, which takes real talent.
Three airlines in one month, and not one of them blamed the guy who bought puts at the top. Unfair.
Your Southwest stock is now a Boeing 737 with a coupon for a free checked bag, and the bag is your retirement.
Photo by Forsaken Films on Unsplash
Leave a Comment