SOUTHWEST AIRLINES CO (LUV) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that SOUTHWEST AIRLINES CO surfaced in its latest filing.

• The Company is dependent on Boeing as the sole manufacturer of its aircraft, operating the MAX 8 and awaiting delivery of the MAX 7, which depends on FAA certification. Boeing's manufacturing challenges have caused delivery delays of the MAX 8. If MAX aircraft become unavailable, flight operations would be materially adversely affected. If MAX 7 certification is delayed, growth and network plans could be restricted unless the Company procures other aircraft types.
• The Company terminated its remaining fuel hedge positions in second quarter 2025 and does not intend to add new fuel derivatives.2025-06-30
• In 2024 and 2025, the Company announced transformational initiatives: changing to an assigned seating model, offering extra legroom seating, formalizing international carrier partnerships, offering Getaways by Southwest, introducing 24-hour operations, reducing turn times between flights, and introducing bag fees for most fare products.2025
• The next final labor agreement with its twelve unionized Employee groups becomes amendable in October 2026.2026-10-01
• The Company offered a voluntary separation program to certain Employees in 2024.2024
• The Company implemented a reduction in workforce in 2025.2025
• Winter Storm Fern in January 2026, Hurricane Milton in October 2024, and Winter Storm Elliott in December 2022 have adversely and materially impacted the Company's operations. The Company has experienced operational challenges during and subsequent to Winter Storm Elliott related to crew scheduling.2026-01
• The Company has been exposed to risks from the 2023 Maui wildfires and the 2025 Los Angeles wildfires.
• In November 2025 during the partial government shutdown, the FAA issued an emergency order mandating an industry-wide reduction in flights at 40 major U.S. airports.2025-11
• The FAA's March 2019 grounding of all Boeing 737 MAX aircraft.2019-03
• 2025 Newark outages and September 2025 Dallas outages causing ground stops, delays, and cancellations.2025-09
• In 2019, the Company began service to Hawaii after receiving FAA approval for ETOPS.2019
• The Company has entered into interline partnership agreements with Icelandair, China Airlines, EVA Air, Philippine Airlines, Condor, and Turkish Airlines.
• The Company's Bylaws designate the United States District Court for the Northern District of Texas or the Texas Business Court in Dallas County as the exclusive forum for certain claims, include a waiver of jury trial for internal entity claims, and require a shareholder to beneficially own at least three percent of outstanding shares to maintain a derivative proceeding.