Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Relevant comparative operating statistics for the three months ended March 31, 2025 and 2024 are included below. The Company provides these operating statistics because they are commonly used in the airline industry and, as such, allow readers to compare the Company’s performance against its results for the prior year period, as well as against the performance of the Company’s peers.

						Three months ended March 31,
						2025						2024						Change
Revenue passengers carried (000s)						29,990						32,872						(8.8)		%
Enplaned passengers (000s)						37,139						40,897						(9.2)		%
Revenue passenger miles (RPMs) (in millions)(a)						30,629						33,087						(7.4)		%
Available seat miles (ASMs) (in millions)(b)						41,432						42,248						(1.9)		%
Load factor(c)						73.9		%				78.3		%				(4.4)			pts.
Average length of passenger haul (miles)						1,021						1,007						1.4		%
Average aircraft stage length (miles)						771						753						2.4		%
Trips flown						331,886						349,979						(5.2)		%
Seats flown (000s)(d)						53,237						55,694						(4.4)		%
Seats per trip(e)						160.4						159.1						0.8		%
Average passenger fare						$	193.75					$	173.76					11.5		%
Passenger revenue yield per RPM (cents)(f)						18.97						17.26						9.9		%
Operating revenues per ASM (cents)(g)						15.51						14.98						3.5		%
Passenger revenue per ASM (cents)(h)						14.02						13.52						3.7		%
Operating expenses per ASM (cents)(i)						16.05						15.91						0.9		%
Operating expenses per ASM, excluding fuel (cents)						13.04						12.28						6.2		%
Operating expenses per ASM, excluding fuel and profit sharing (cents)						13.04						12.28						6.2		%
Fuel costs per gallon, including fuel tax						$	2.49					$	2.92					(14.7)		%
Fuel costs per gallon, including fuel tax (economic)						$	2.49					$	2.92					(14.7)		%
Fuel consumed, in gallons (millions)						500						524						(4.6)		%
Active fulltime equivalent Employees						71,506						74,695						(4.3)		%
Aircraft at end of period						800						819						(2.3)		%

(a)A revenue passenger mile is one paying passenger flown one mile. Also referred to as "traffic," which is a measure of demand for a given period.

(b)An available seat mile is one seat (empty or full) flown one mile. Also referred to as "capacity," which is a measure of the space available to carry passengers in a given period.

(c)Revenue passenger miles divided by available seat miles.

(d)Seats flown is calculated using total number of seats available by aircraft type multiplied by the total trips flown by the same aircraft type during a particular period.

(e)Seats per trip is calculated by dividing seats flown by trips flown.

(f)Calculated as passenger revenue divided by revenue passenger miles. Also referred to as "yield," this is the average cost paid by a paying passenger to fly one mile, which is a measure of revenue production and fares.

(g)Calculated as operating revenues divided by available seat miles. Also referred to as "operating unit revenues" or "RASM," this is a measure of operating revenue production based on the total available seat miles flown during a particular period.

(h)Calculated as passenger revenue divided by available seat miles. Also referred to as "passenger unit revenues" or "PRASM," this is a measure of passenger revenue production based on the total available seat miles flown during a particular period.

(i)Calculated as operating expenses divided by available seat miles. Also referred to as "unit costs" or "cost per available seat mile" or "CASM," this is the average cost to fly an aircraft seat (empty or full) one mile, which is a measure of cost efficiencies.

Financial Highlights

The Company reports its results in accordance with accounting principles generally accepted in the United States ("GAAP"). The Company also provides certain non-GAAP financial measures which the Company's management utilizes to evaluate its ongoing financial performance, and the Company believes provides additional insight to investors as supplemental information to its GAAP results, as noted in the following tables. See Note Regarding Use of Non-GAAP Financial Measures and the Reconciliation of Reported Amounts to Non-GAAP Financial Measures for additional detail regarding non-GAAP financial measures.

						Three months ended March 31,
(in millions, except per share amounts)
GAAP						2025						2024						Change
Operating loss						$	(223)					$	(393)					(43.3)		%
Net loss						$	(149)					$	(231)					(35.5)		%
Net loss per share, diluted						$	(0.26)					$	(0.39)					(33.3)		%
Non-GAAP
Operating loss						$	(128)					$	(377)					(66.0)		%
Net loss						$	(77)					$	(218)					(64.7)		%
Net loss per share, diluted						$	(0.13)					$	(0.36)					(63.9)		%

The Company recorded first quarter 2025 operating revenues of $6.4 billion, a first quarter Company record. This record revenue performance was achieved, despite year-over-year declines in capacity and load factor, due to commercial actions, including network and revenue management initiatives, driving an all-time record yield performance. Both Passenger revenue and Other revenue were first quarter records. The Company has also implemented cost savings initiatives, including corporate overhead reductions. See Note 11 to the unaudited Condensed Consolidated Financial Statements for further information.

Aided by the record first quarter revenue performance, the Company's operating loss and net loss for the three months ended March 31, 2025, on a GAAP and non-GAAP basis, decreased compared to the same prior year period. Operating expenses remained relatively flat, driven by higher Salaries, wages, and benefits expense, partially offset by lower Fuel and oil expense. On a GAAP basis, the Company's Operating expenses decreased 1.1 percent year-over-year, while Operating revenues increased 1.6 percent. Operating expenses for the three months ended March 31, 2025, on a non-GAAP basis, excluded pre-tax charges of $95 million, most notably $62 million related to severance and related professional fees associated with the Company's reduction in workforce.

2025 Outlook

The following tables provide select financial guidance for second quarter 2025, as well as select full year 2025 and 2026 targets. Amid the current macroeconomic uncertainty, it is difficult to forecast given recent and short-lived booking trends. As such, the Company is not reiterating its full year 2025 or 2026 earnings before interest and taxes, excluding special items ("EBIT") guides. However, the Company remains confident in and committed to continued strong execution of its initiatives and is reaffirming its targets of $1.8 billion full year 2025 and $4.3 billion full year 2026 incremental EBIT contribution from those initiatives.

									2Q 2025 Estimation
RASM (a), year-over-year									Flat to down 4%
ASMs (b), year-over-year									Up 1% to 2%
Fuel cost per gallon (c)(d)									$2.20 to $2.30
ASMs per gallon (fuel efficiency)									82 to 83
CASM-X (e), year-over-year (c)(f)									Up 3.5% to 5.5%
Scheduled debt repayments (billions) (g)									~$2.6
Interest expense (millions)									~$39

						2025 Target			2026 Target
EBIT (h) contribution from initiatives (billions)						~$1.8			~$4.3

(a) Operating revenue per available seat mile ("RASM" or "unit revenues").

(b) Available seat miles ("ASMs" or "capacity").

(c) See Note Regarding Use of Non-GAAP Financial Measures for additional information on special items. In addition, information regarding special items and economic results is included in the accompanying table Reconciliation of Reported Amounts to Non-GAAP Measures (also referred to as "excluding special items").

(d) Economic fuel cost per gallon ("Fuel cost per gallon") includes fuel taxes, fuel hedging premium expense, and any related cash settlements from fuel derivative contracts. Based on the Company's existing fuel derivative contracts and market prices as of April 15, 2025, second quarter 2025 economic fuel costs per gallon were estimated to be in the range of $2.20 to $2.30, including fuel hedging premium expense of $0.06 per gallon and no cash settlements from fuel derivative contracts. Economic fuel cost projections do not reflect the potential impact of special items because the Company cannot reliably predict or estimate the hedge accounting impact associated with the volatility of the energy markets, or the impact to its financial statements in future periods. Accordingly, the Company believes a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures for projected results is not meaningful or available without unreasonable effort. See Note Regarding Use of Non-GAAP Financial Measures.

(e) Operating expenses per available seat mile, excluding fuel and oil expense, special items, and profit sharing ("CASM-X" or "unit costs").

(f) Projections do not reflect the potential impact of fuel and oil expense, special items, and profit sharing because the Company cannot reliably predict or estimate those items or expenses or their impact to its financial statements in future periods, especially considering the significant volatility of the fuel and oil expense line item. Accordingly, the Company believes a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures for these projected results is not meaningful or available without unreasonable effort.

(g) Includes a $976 million prepayment made on April 17, 2025 for the first tranche of the Payroll Support Program notes.

(h) A non-GAAP financial measure calculated as earnings before interest and taxes, excluding special items ("EBIT"). EBIT (a) excludes annual average of $400 million to $500 million for fleet initiative over the three-year period from 2025 to 2027, (b) assumes profit sharing of 15 percent, and (c) assumes a fuel price of ~$2.33 per gallon in 2025 and 2026. Projections do not reflect the potential impact of special items because the Company cannot reliably predict or estimate those items or expenses or their impact to its financial statements in future periods. Accordingly, the Company believes a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures for these projected results is not meaningful or available without unreasonable effort.

The Company expects second quarter 2025 unit revenues to be in the range of flat to down 4 percent on capacity in the range of up 1 percent to 2 percent, both on a year-over-year basis. This guidance range contemplates benefits from continued execution of Company-specific initiatives, offset by softness in the demand environment. Thus far, the Company has seen no evidence of book-away following its recent announcement of policy changes, including flight credit expiration and checked bag fees. The Company's second quarter guidance assumes current trends will persist through the remainder of the quarter.

The Company anticipates second quarter 2025 CASM-X to increase in the range of 3.5 percent to 5.5 percent, year-over-year, driven primarily by the continuation of inflationary pressures, including those associated with labor contracts ratified in 2024. The Company remains focused on driving efficiencies to offset overall inflationary cost pressures and achieve its accelerated cost initiative targets.

Company Overview

Transformational Revenue Initiatives

The Company is evolving rapidly, implementing new initiatives that are expected to enhance optionality for current and future Customers, improve financial performance, and drive Shareholder value. As announced on March 11, 2025:

• For flights booked and ticketed or changed on or after May 28, 2025, Southwest will introduce bag fees for most fare products. However, the Company will continue to offer two free checked bags to Rapid Rewards® A-List Preferred Members and Customers traveling on Business Select fares and offer one free checked bag to A-List Members. Southwest will also credit one checked bag for co-brand Cardmembers under its credit card program. Customers who do not qualify for these free bag options will be charged for their checked bags (weight and size limitations apply).

• The Company is further optimizing its loyalty program by re-aligning the number of Rapid Rewards points Customers earn on qualifying flights with the fare paid. Customers now earn more points on Business Select fares, while earning fewer on Wanna Get Away and Wanna Get Away Plus fares. The Company also has introduced variable redemption rates across higher-demand and lower-demand flights.

• The Company will introduce a new, Basic fare on its lowest-priced tickets purchased on or after May 28, 2025, in advance of offering assigned seating and extra legroom options.

• Flight credits originating from a Basic fare purchase will expire six months from ticketing date. Flight credits issued for other fares for tickets purchased on or after May 28, 2025, will expire one year from the date of ticketing.

• The Company expanded distribution to online travel agencies with the launch of its relationship with Expedia on February 26, 2025.

These strategic moves add to the initiatives already underway at Southwest, including the implementation of assigned seating and extended legroom options, as well as an initial international airline partnership with Icelandair that began on February 13, 2025, the same day the Company operated its first-ever scheduled overnight redeye flights. The move to assigned and premium seating will require incorporating new technologies and procedures for a seamless transition, and the new cabin layout requires approvals from the Federal Aviation Administration ("FAA"). The Company recently received necessary approvals and certifications to begin extra legroom seating retrofits on Boeing 737-8 ("-8") and Boeing 737-800 ("-800") aircraft, and expects the Boeing 737-700 ("-700") aircraft to receive necessary approvals and certifications later this year. The Company expects to begin selling assigned and extra legroom seats in third quarter 2025 for operation beginning in first quarter of next year.

The Company has also continued to enhance its onboard offerings, with improvements such as faster WiFi, in-seat power, and larger overhead bins, and work is well underway on a refreshed cabin design, including new, more comfortable RECARO seats.

Through these initiatives, the Company's goal is to return to historical levels of financial performance, focusing on its accelerated cost reduction plan, return on invested capital, and earnings before interest and taxes, excluding special items.

Other Initiatives and Quarterly Developments

In first quarter 2025, the Company returned $857 million to Shareholders through $107 million in dividend payments and a $750 million accelerated share repurchase program, which was launched in February 2025 and completed in April 2025. The Company has $1.5 billion remaining under its $2.5 billion share repurchase authorization. On March 11, 2025, the Company announced its intention to launch an accelerated share repurchase program in second quarter 2025 for the remaining $1.5 billion, which it expects to complete by the end of July

2025. See "Liquidity and Capital Resources" below and Part II, Item 2 - Issuer Purchases of Equity Securities for further information on the Company's share repurchases.

In January 2025, the Company reached an amended co-brand agreement with Chase Bank USA, N.A. ("Chase"). The amendment includes enhanced Cardmember benefits associated with the Company's planned assigned and premium seating initiative and supports its multi-year financial targets.

On February 19, 2025, the Company entered into an Amendment (the "Amendment") to the Cooperation Agreement among the Company, Elliott Investment Management L.P., Elliott Associates, L.P., Elliott International, L.P., and The Liverpool Limited Partnership (collectively, the "Elliott Parties"), dated October 23, 2024 (the "Cooperation Agreement"), which, among other things, (i) increases the maximum aggregate economic exposure that the Elliott Parties may acquire during the term of the Cooperation Agreement from 14.9 percent to 19.9 percent of the Company's then-outstanding common stock, par value $1.00, and (ii) extends the restriction on the Elliott Parties acquiring more than the maximum beneficial ownership of 12.49 percent of the then-outstanding common stock until 9:00 a.m. Central Time on the earlier of (x) the day after the record date for the Company's 2026 Annual Meeting of Shareholders and (y) April 1, 2026. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which is filed as Exhibit 10.1 to this Form 10-Q.

In February 2025, the Company implemented a reduction in workforce to reduce operating costs, increase efficiency, and create a leaner and more agile organization as part of the Company's transformational plan. The reduction in workforce focused almost entirely on corporate overhead and leadership positions and provided for the reduction of approximately 1,750 Employee roles, or 15 percent of corporate positions. Separations are expected to be substantially complete by the end of second quarter 2025. See Note 11 to the unaudited Condensed Consolidated Financial Statements for further information.

As a result of the reduction in workforce, the Company estimates 2025 savings of approximately $210 million and 2026 savings of approximately $300 million. These savings exclude a one-time GAAP pre-tax charge in first quarter 2025 of $62 million, substantially all of which is due to severance and related professional fees, which the Company has treated as a special item. See Note Regarding Use of Non-GAAP Financial Measures and the Reconciliation of Reported Amounts to Non-GAAP Financial Measures for additional detail regarding non-GAAP financial measures. One-time costs may vary based on specific Employee elections, and the majority of the associated future cash expenditures are expected to take place in second quarter 2025.

Fleet Information

As a result of Boeing's delivery delays, the Company has previously replanned its capacity and delivery expectations multiple times and will continue to closely monitor the ongoing aircraft delivery delays with Boeing and further adjust expectations as needed. The Company is now proactively reducing capacity in the second half of 2025 to accommodate a lower demand environment and capture associated cost savings. While schedules are not final, the Company expects to reduce both third quarter and fourth quarter capacity by roughly one and one-half points and anticipates that full year 2025 capacity will now be up roughly 1 percent, year-over-year, which would be on the low end of the prior expectation of up 1 percent to 2 percent, year-over-year. This modest growth is driven entirely by an increase in aircraft utilization provided by redeye flying and turn time reduction initiatives.

The Company is not making any material updates to its fleet assumptions, including aircraft delivery and retirement expectations, at this time. The Company will continue to evaluate the potential for fleet transactions on an opportunistic basis.

The Company ended first quarter 2025 with 800 Boeing 737 aircraft, including 256 -8 aircraft. During first quarter 2025, the Company retired 12 -700 aircraft and two -800 aircraft and took delivery of 11 -8 aircraft. As of April 24, 2025, during 2025 the Company has exercised a total of 12 Boeing 737-7 ("-7") options for delivery in 2026. The Company's order book with Boeing as of April 24, 2025, consists of a total of 504 MAX firm orders (308 -7 aircraft

and 196 -8 aircraft), less 11 -8 deliveries in 2025, for the years 2025 through 2031, including 63 MAX aircraft that were contractually committed for 2024, but were not received, and 168 MAX options (-7s or -8s) for the years 2026 through 2031. In January 2025, the Company completed the sale-leaseback of one -800 aircraft. See Note 10 to the unaudited Condensed Consolidated Financial Statements for further information on the sale-leaseback transaction.

Material Changes in Results of Operations

Comparison of three months ended March 31, 2025 and March 31, 2024

			Three months ended March 31,												Increase (Decrease)						Percent change
(in millions)			2025						2024
Passenger			$	5,811					$	5,712					$	99					1.7		%
Freight			41						42						(1)						(2.4)
Other			576						575						1						0.2
Total operating revenues			$	6,428					$	6,329					$	99					1.6		%
Salaries, wages, and benefits			$	3,102					$	2,940					$	162					5.5		%
Fuel and oil			1,249						1,531						(282)						(18.4)
Maintenance materials and repairs			292						361						(69)						(19.1)
Landing fees and airport rentals			522						464						58						12.5
Depreciation and amortization			396						408						(12)						(2.9)
Other operating expenses			1,090						1,018						72						7.1
Total operating expenses			$	6,651					$	6,722					$	(71)					(1.1)		%

Operating Revenues

Total operating revenues for first quarter 2025 increased by $99 million, or 1.6 percent, year-over-year. Passenger revenues for first quarter 2025 increased by $99 million, or 1.7 percent, year-over-year, and Other revenues for first quarter 2025 increased by $1 million, or 0.2 percent, year-over-year, to achieve all time first quarter Company records of $5.8 billion and $576 million, respectively. These revenue increases were primarily due to a 9.9 percent increase in yield, partially offset by a year-over-year decline in Load factor. The yield improvements were primarily due to revenue management actions and capacity moderation. The Company's Rapid Rewards® loyalty program had a record first quarter level of Member engagement, as measured by first quarter spend on the Company's co-branded Chase® Visa credit card. First quarter 2025 RASM was 15.51 cents, finishing 3.5 percent higher than first quarter 2024, primarily driven by an increase in yield of 9.9 percent, partially offset by a decrease in Load factor of 4.4 points. These revenue results were impacted as demand weakened throughout the quarter, driving softness in bookings, particularly in domestic leisure travel, where the Company is currently more heavily weighted compared with larger industry peers.

Operating Expenses

Operating expenses for first quarter 2025 decreased by $71 million, or 1.1 percent, compared with first quarter 2024, and capacity decreased 1.9 percent over the same prior year period. The vast majority of the dollar decrease was due to a year-over-year decrease in Fuel and oil expense, partially offset by higher Salaries, wages, and benefits expense. Historically, except for changes in the price of fuel, changes in Operating expenses for airlines have been largely driven by changes in capacity, or ASMs. The following table presents the Company's Operating expenses per ASM for the first quarter of 2025 and 2024, followed by explanations of these changes on both a dollar and unit basis.

			Three months ended March 31,												Per ASM change						Percent change
(in cents, except for percentages)			2025						2024
Salaries, wages, and benefits			7.49		¢				6.96		¢				0.53		¢				7.6		%
Fuel and oil			3.01						3.63						(0.62)						(17.1)
Maintenance materials and repairs			0.70						0.85						(0.15)						(17.6)
Landing fees and airport rentals			1.26						1.10						0.16						14.5
Depreciation and amortization			0.96						0.96						—						—
Other operating expenses			2.63						2.41						0.22						9.1
Total			16.05		¢				15.91		¢				0.14		¢				0.9		%

Operating expenses per ASM for first quarter 2025 increased by 0.9 percent, compared with first quarter 2024, primarily due to increases in Salaries, wages and benefits expense and Other operating expenses, partially offset by a decrease in Fuel and oil expense. Operating expenses per ASM for first quarter 2025, excluding Fuel and oil expense, profit sharing, and special items (a non-GAAP financial measure), increased 4.6 percent, compared with first quarter 2024, primarily due to contract-driven wage rate inflation in Salaries, wages, and benefits expense in 2025. See Note Regarding Use of Non-GAAP Financial Measures and the Reconciliation of Reported Amounts to Non-GAAP Financial Measures for additional detail regarding non-GAAP financial measures.

Salaries, wages, and benefits expense for first quarter 2025 increased by $162 million, or 5.5 percent, compared with first quarter 2024. On a per ASM basis, first quarter 2025 Salaries, wages, and benefits expense increased 7.6 percent, compared with first quarter 2024. On a dollar basis, approximately 55 percent of the increase was due to net step/pay rate increases and related benefits for certain workgroups. Additionally, approximately 20 percent of the increase was due to a one-time severance cost as a result of the workforce reduction in February 2025, which was considered a special item and excluded from the Company's non-GAAP financials. On a per ASM basis, the increase was primarily due to higher wage rates. See Note 11 to the unaudited Condensed Consolidated Financial Statements for additional detail regarding the reduction in workforce, and Note Regarding Use of Non-GAAP Financial Measures and the Reconciliation of Reported Amounts to Non-GAAP Financial Measures for additional detail regarding non-GAAP financial measures.

Fuel and oil expense for first quarter 2025 decreased by $282 million, or 18.4 percent, compared with first quarter 2024. On a per ASM basis, first quarter 2025 Fuel and oil expense decreased 17.1 percent. On a dollar basis, approximately 75 percent of the decrease was attributable to a decrease in fuel prices, and the remainder was due to a decrease in fuel gallons consumed. On a per ASM basis, the majority of the change was due to lower jet fuel prices. The following table provides more information on the Company's economic fuel cost per gallon, including the impact of fuel hedging premium expense and fuel derivative contract settlements:

			Three months ended March 31,
			2025						2024
Economic fuel costs per gallon			$	2.49					$	2.92
Fuel hedging premium expense (in millions)			$	37					$	39
Fuel hedging cash settlement gain (in millions)			$	—					$	18
Fuel hedging premium expense per gallon			$	0.07					$	0.08
Fuel hedging cash settlement gain per gallon			$	—					$	0.04

See Note Regarding Use of Non-GAAP Financial Measures and the Reconciliation of Reported Amounts to Non-GAAP Financial Measures for additional detail regarding non-GAAP financial measures.

The Company's first quarter 2025 available seat miles per gallon ("fuel efficiency") increased 2.6 percent, year-over-year, primarily due to operating more -8 aircraft, the Company's most fuel-efficient aircraft, as a percentage of

its fleet. The continued deliveries of MAX aircraft are expected to remain critical to the Company's efforts to modernize its fleet.

The Company's current fuel derivative contracts contain instruments based on Brent crude oil. The economic fuel price per gallon sensitivities provided in the table below assume the relationship between Brent crude oil and refined products based on market prices as of April 15, 2025.

			Estimated economic fuel price per gallon, including taxes and fuel hedging premiums (b)
Average Brent Crude Oil price per barrel			Second Quarter 2025
$40			$1.40 - $1.50
$50			$1.70 - $1.80
Current Market (a)			$2.20 - $2.30
$70			$2.40 - $2.50
$80			$2.70 - $2.80
$90			$3.00 - $3.10
$100			$3.20 - $3.30
Fair market value of fuel derivative contracts settling in period			$—
Estimated premium costs			$37 million

(a) Brent crude oil average market price as of April 15, 2025 was $64 per barrel for second quarter 2025.

(b) Based on the Company's existing fuel derivative contracts and market prices as of April 15, 2025, second quarter 2025 economic fuel costs per gallon were estimated to be in the range of $2.20 to $2.30, including fuel hedging premium expense of $0.06 per gallon and no cash settlements from fuel derivative contracts. Economic fuel cost projections do not reflect the potential impact of special items because the Company cannot reliably predict or estimate the hedge accounting impact associated with the volatility of the energy markets, or the impact to its financial statements in future periods. Accordingly, the Company believes a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures for projected results is not meaningful or available without unreasonable effort. See Note Regarding Use of Non-GAAP Financial Measures.

Based on higher fuel hedging premium costs over time and other factors, the Company has discontinued its fuel hedging program and has no plans to add additional derivatives to its portfolio, which currently extends through 2027. The Company is providing its maximum percentage of estimated fuel consumption covered by fuel derivative contracts in the following table:

Period			Maximum fuel hedged percentage (a)(b)			Estimated premium costs
2025			47%			$148 million
2026			43%			$135 million
2027			13%			$40 million

(a) Based on the Company's current available seat mile plans. The Company is currently 45 percent hedged in second quarter 2025 and 46 percent hedged in second half 2025.

(b) The Company's maximum fuel hedged percentage is calculated using the maximum number of gallons that are covered by derivative contracts divided by the Company's estimate of total fuel gallons to be consumed for each respective period. The Company's maximum number of gallons that are covered by derivative contracts may be at different strike prices and at strike prices materially higher than the current market prices. The volume of gallons covered by derivative contracts that are ultimately exercised in any given period may vary significantly from the volumes used to calculate the Company's maximum fuel hedged percentages, as market prices and the Company's fuel consumption fluctuate.

As a result of applying hedge accounting in prior periods, the Company has amounts in Accumulated other comprehensive income ("AOCI") that will be recognized in the unaudited Condensed Consolidated Statement of Comprehensive Loss in future periods when the underlying fuel derivative contracts settle. The following table displays the Company's estimated fair value of remaining fuel derivative contracts (not considering the impact of the cash collateral provided to or received from counterparties—see Note 3 to the unaudited Condensed Consolidated Financial Statements for further information), as well as the deferred amounts in AOCI as of March 31, 2025, and the expected future periods in which these items are expected to settle and/or be recognized in the unaudited Condensed Consolidated Statement of Comprehensive Loss (in millions):

Year						Fair value of fuel derivative contracts at March 31, 2025						Amount of gains (losses) deferred in AOCI at March 31, 2025 (net of tax)
Remainder of 2025						$	10					$	(77)
2026						52						(64)
2027						30						(7)
Total						$	92					$	(148)

Maintenance materials and repairs expense for first quarter 2025 decreased by $69 million, or 19.1 percent, compared with first quarter 2024. On a per ASM basis, Maintenance materials and repairs expense decreased by 17.6 percent compared with first quarter 2024. On a dollar and per ASM basis, the decrease was primarily due to a decrease in engine shop visits and other engine expenses associated with the Company's -800 fleet.

Landing fees and airport rentals expense for first quarter 2025 increased by $58 million, or 12.5 percent, compared with first quarter 2024. On a per ASM basis, Landing fees and airport rentals expense increased 14.5 percent, compared with first quarter 2024. On a dollar and per ASM basis, approximately 60 percent of the increase was primarily attributable to an increase in airport rental expense throughout the network driven by the higher rates charged by airports for leased space. The remainder of the increase was due to receiving fewer favorable settlements and credits from various airports in first quarter 2025.

Depreciation and amortization expense for first quarter 2025 decreased by $12 million, or 2.9 percent, compared with first quarter 2024. On a per ASM basis, Depreciation and amortization expense remained flat compared with first quarter 2024. On a dollar basis, the decrease was primarily due to accelerating depreciation for fewer -700 aircraft planned for early retirement in 2025 compared to 2024.

Other operating expenses for first quarter 2025 increased by $72 million, or 7.1 percent, compared with first quarter 2024. Included within this line item was aircraft rentals expense in the amounts of $87 million and $51 million for the three-month periods ended March 31, 2025 and 2024, respectively. On a per ASM basis, Other operating expenses increased 9.1 percent, compared with first quarter 2024. On a dollar and per ASM basis, the increase was primarily due to an approximately $36 million increase in aircraft rentals expense associated with recent fleet transactions, and an approximately $31 million increase in professional fees driven by professional advisory fees related to the Company's implementation of its comprehensive transformational plan. These increases were partially offset by a year-over-year decrease in marketing and advertising costs. See Note 10 to the unaudited Condensed Consolidated Financial Statements for further information on the recent fleet transactions.

Non-Operating Expenses (Income)

Interest expense for first quarter 2025 decreased by $19 million, or 29.2 percent, compared with first quarter 2024, primarily due to prepaying the 5.25% senior unsecured notes due May 2025 in December 2024.

Interest income for first quarter 2025 decreased by $57 million, or 40.4 percent, compared with first quarter 2024, primarily due to lower cash and investment balances and a lower interest rate in the total investment portfolio.

The following table displays the components of Other (gains) losses, net, for the three months ended March 31, 2025 and 2024:

			Three months ended March 31,
(in millions)			2025						2024
Mark-to-market impact from fuel contracts settling in future periods			$	—					$	1
Mark-to-market impact on deferred compensation plan investments			18						(14)
Other			—						1
			$	18					$	(12)

Income Taxes

The Company's effective tax rate was 22.3 percent in first quarter 2025, compared with 22.5 percent in first quarter 2024. The year-over-year decrease in the tax rate was primarily due to additional federal tax credits generated in 2025.

Reconciliation of Reported Amounts to Non-GAAP Financial Measures (excluding special items) (unaudited)

(in millions, except per share amounts and per ASM amounts)

			Three months ended March 31,												Percent
			2025						2024						Change
Fuel and oil expense, unhedged			$	1,212					$	1,510
Add: Premium cost of fuel contracts designated as hedges			37						39
Deduct: Fuel hedge gains included in Fuel and oil expense, net			—						(18)
Fuel and oil expense, as reported (and economic)			$	1,249					$	1,531					(18.4)
Total operating expenses, as reported			$	6,651					$	6,722
Deduct: Labor contract adjustment			—						(9)
Deduct: Litigation accruals			(19)						(7)
Deduct: Transformation costs			(14)						—
Deduct: Severance and related costs (a)			(62)						—
Total operating expenses, excluding special items			$	6,556					$	6,706					(2.2)
Deduct: Fuel and oil expense, as reported (and economic)			(1,249)						(1,531)
Operating expenses, excluding Fuel and oil expense, special items, and profit sharing			$	5,307					$	5,175					2.6
Operating loss, as reported			$	(223)					$	(393)
Add: Labor contract adjustment			—						9
Add: Litigation accruals			19						7
Add: Transformation costs			14						—
Add: Severance and related costs (a)			62						—
Operating loss, excluding special items			$	(128)					$	(377)					(66.0)
Other (gains) losses, net, as reported			$	18					$	(12)
Deduct: Mark-to-market impact from fuel contracts settling in future periods (b)			—						(1)
Other (gains) losses, net, excluding special items			$	18					$	(13)					n.m.
Loss before income taxes, as reported			$	(192)					$	(298)
Add: Labor contract adjustment			—						9
Add: Mark-to-market impact from fuel contracts settling in future periods (b)			—						1
Add: Litigation accruals			19						7
Add: Transformation costs			14						—
Add: Severance and related costs (a)			62						—
Loss before income taxes, excluding special items			$	(97)					$	(281)					(65.5)
Benefit for income taxes, as reported			$	(43)					$	(67)
Add: Net loss tax impact of fuel and special items (c)			23						4
Benefit for income taxes, net, excluding special items			$	(20)					$	(63)					(68.3)
Net loss, as reported			$	(149)					$	(231)
Add: Labor contract adjustment			—						9
Add: Mark-to-market impact from fuel contracts settling in future periods (b)			—						1
Add: Litigation accruals			19						7
Add: Transformation costs			14						—
Add: Severance and related costs (a)			62						—
Deduct: Net loss tax impact of special items (c)			(23)						(4)
Net loss, excluding special items			$	(77)					$	(218)					(64.7)

			Three months ended March 31,												Percent
			2025						2024						Change
Net loss per share, diluted, as reported			$	(0.26)					$	(0.39)
Add: Impact of special items			0.16						0.04
Deduct: Net loss tax impact of special items (c)			(0.03)						(0.01)
Net loss per share, diluted, excluding special items			$	(0.13)					$	(0.36)					(63.9)
Operating expenses per ASM (cents)			16.05		¢				15.91		¢
Deduct: Impact of special items			(0.23)						(0.03)
Deduct: Fuel and oil expense divided by ASMs			(3.01)						(3.63)
Operating expenses per ASM, excluding Fuel and oil expense, special items, and profit sharing (cents)			12.81		¢				12.25		¢				4.6

(a) Represents Employee severance payments and related professional fees resulting from the workforce reduction in February 2025 ($53 million in Salaries, wages, and benefits and $9 million in Other operating expenses). See Note 11 to the unaudited Condensed Consolidated Financial Statements for further information.

(b) See Note 3 to the unaudited Condensed Consolidated Financial Statements for further information.

(c) Tax amounts for each individual special item are calculated at the Company's effective rate for the applicable period and totaled in this line item.

Non-GAAP Return on Invested Capital (ROIC) (in millions) (unaudited)

			Twelve months ended						Twelve months ended
			March 31, 2025						March 31, 2024
Operating income, as reported			$	491					$	115
Breakage revenue adjustment			116						—
Severance and related costs			62						—
Voluntary Employee programs			5						—
TWU 555 contract adjustment			—						9
TWU 556 contract adjustment			—						180
SWAPA contract adjustment			—						354
Net impact from fuel contracts			(43)						17
Professional advisory fees			37						—
Transformation costs			18						—
DOT settlement			—						107
Litigation accruals			19						19
Operating income, non-GAAP			$	705					$	801
Net adjustment for aircraft leases (a)			160						128
Adjusted operating income, non-GAAP (A)			$	865					$	929
Non-GAAP tax rate (B)			23.1		%	(d)			23.5		%	(e)
Net operating profit after-tax, NOPAT (A (1-B) = C)*			$	665					$	711
Debt, including finance leases (b)			$	7,479					$	8,016
Equity (b)			10,158						10,571
Net present value of aircraft operating leases (b)			952						990
Average invested capital			$	18,589					$	19,577
Equity adjustment for hedge accounting (c)			19						(99)
Adjusted average invested capital (D)			$	18,608					$	19,478
Non-GAAP ROIC, pre-tax (A/D)			4.6		%				4.8		%
Non-GAAP ROIC, after-tax (C/D)			3.6		%				3.7		%

(a) Net adjustment to reflect all aircraft in fleet as owned (i.e., the impact of eliminating aircraft rent expense and replacing with estimated depreciation expense for those same aircraft). The Company makes this adjustment to enhance comparability to other entities that have different capital structures by utilizing alternative financing decisions.

(b) Calculated as an average of the five most recent quarter end balances or remaining obligations. The Net present value of aircraft operating leases represents the assumption that all aircraft in the Company’s fleet are owned, as it reflects the remaining contractual commitments discounted at the Company's estimated incremental borrowing rate as of the time each individual lease was signed.

(c) The Equity adjustment in the denominator adjusts for the cumulative impacts, in Accumulated other comprehensive income and Retained earnings, of gains and/or losses that will settle in future periods, including those associated with the Company's fuel hedges. The current period impact of these gains and/or losses is reflected in the Net impact from fuel contracts in the numerator.

(d) The GAAP twelve month rolling tax rate as of March 31, 2025, was 22.3 percent, and the Non-GAAP twelve month rolling tax rate was 23.1 percent. See Note Regarding Use of Non-GAAP Financial Measures for additional information.

(e) The GAAP twelve month rolling tax rate as of March 31, 2024, was 27.1 percent, and the Non-GAAP twelve month rolling tax rate was 23.5 percent. See Note Regarding Use of Non-GAAP Financial Measures for additional information.

Note Regarding Use of Non-GAAP Financial Measures

The Company's unaudited Condensed Consolidated Financial Statements are prepared in accordance with GAAP. These GAAP financial statements may include (i) unrealized noncash adjustments and reclassifications, which can be significant, as a result of accounting requirements and elections made under accounting pronouncements relating to derivative instruments and hedging and (ii) other charges and benefits the Company believes are unusual and/or infrequent in nature and thus may make comparisons to its prior or future performance difficult.

As a result, the Company also provides financial information in this filing that was not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP. The Company provides supplemental non-GAAP financial information (also referred to as "excluding special items"), including results that it refers to as "economic," which the Company's management utilizes to evaluate its ongoing financial performance and the Company believes provides additional insight to investors as supplemental information to its GAAP results. The non-GAAP measures provided that relate to the Company’s performance on an economic fuel cost basis include Total operating expenses, non-GAAP; Operating expenses, non-GAAP excluding Fuel and oil expense and profit sharing; Operating loss, non-GAAP; Adjusted Operating income, non-GAAP; Other (gains) losses, net, non-GAAP; Loss before income taxes, non-GAAP; Benefit for income taxes, net, non-GAAP; Net loss, non-GAAP; Net loss per share, diluted, non-GAAP; and Operating expenses per ASM, non-GAAP, excluding Fuel and oil expense and profit sharing (cents). The Company's economic Fuel and oil expense results differ from GAAP results in that they only include the actual cash settlements from fuel hedge contracts - all reflected within Fuel and oil expense in the period of settlement. Thus, Fuel and oil expense on an economic basis has historically been utilized by the Company, as well as some of the other airlines that utilize fuel hedging, as it reflects the Company’s actual net cash outlays for fuel during the applicable period, inclusive of settled fuel derivative contracts. Any net fuel hedging premium costs paid related to option contracts that are designated as hedges are reflected as a component of Fuel and oil expense, for both GAAP and non-GAAP (including economic) purposes in the period of contract settlement. The Company believes these economic results provide further insight into the impact of the Company's fuel hedges on its operating performance and liquidity since they exclude the unrealized, noncash adjustments and reclassifications that are recorded in GAAP results in accordance with accounting guidance relating to derivative instruments, and they reflect all cash settlements related to fuel derivative contracts within Fuel and oil expense. This enables the Company's management, as well as investors and analysts, to consistently assess the Company's operating performance on a year-over-year or quarter-over-quarter basis after considering all efforts in place to manage fuel expense. However, because these measures are not determined in accordance with GAAP, such measures are susceptible to varying calculations, and not all companies calculate the measures in the same manner. As a result, the aforementioned measures, as presented, may not be directly comparable to similarly titled measures presented by other companies.

Further information on (i) the Company's fuel hedging program, (ii) the requirements of accounting for derivative instruments, and (iii) the causes of hedge ineffectiveness and/or mark-to-market gains or losses from derivative instruments is included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and Note 3 to the unaudited Condensed Consolidated Financial Statements.

The Company’s GAAP results in the applicable periods may include other charges or benefits that are also deemed "special items," that the Company believes make its results difficult to compare to prior periods, anticipated future periods, or industry trends. Financial measures identified as non-GAAP (or as excluding special items) have been adjusted to exclude special items. For the periods presented, in addition to the items discussed above, special items include:

1.Incremental expense associated with contract ratification bonuses for various workgroups related to additional compensation for services performed by Employees outside the applicable fiscal period;

2.Charges associated with tentative litigation settlements regarding paid short-term military leave to certain Employees, certain California state meal-and-rest break regulations for Flight Attendants, and an arbitration award in favor of the Company's Pilots relating to a collective-bargaining matter;

3.Expenses associated with professional advisory fees related to the Company's implementation of its comprehensive transformational plan;

4.Charges associated with severance, post-employment benefits, and professional fees as a result of the Company's reduction in workforce;

5.Reversal of breakage revenue recorded in prior years related to a portion of flight credits issued to Customers during 2022 and prior that have either been redeemed or are expected to be redeemed in future periods. The majority of these flight credits were issued during the COVID-19 pandemic as the Company was making significant changes to its flight schedules based on fluctuating demand, which made it difficult to estimate future redemption patterns when compared against historical Customer behavior;

6.Incremental expense associated with a voluntary separation program that allowed eligible Employees the opportunity to voluntarily separate from the Company in exchange for severance, medical/dental coverage for a specified period of time, and travel privileges based on years of service;

7.Expenses associated with incremental professional advisory fees related to activist investor activities, which were not budgeted by the Company or associated with the ongoing operation of the airline; and

8.A charge associated with a settlement reached with the DOT as a result of the Company's December 2022 operational disruption.

Because management believes special items can distort the trends associated with the Company’s ongoing performance as an airline, the Company believes that evaluation of its financial performance can be enhanced by a supplemental presentation of results that exclude the impact of special items in order to enhance consistency and comparativeness with results in prior periods that do not include such items and as a basis for evaluating operating results in future periods. The following measures are often provided, excluding special items, and utilized by the Company’s management, analysts, and investors to enhance comparability of year-over-year results, as well as to industry trends: Total operating expenses, non-GAAP; Operating expenses, non-GAAP excluding Fuel and oil expense and profit sharing; Operating loss, non-GAAP; Adjusted Operating income, non-GAAP; Other (gains) losses, net, non-GAAP; Loss before income taxes, non-GAAP; Benefit for income taxes, net, non-GAAP; Net loss, non-GAAP; Net loss per share, diluted, non-GAAP; and Operating expenses per ASM, non-GAAP, excluding Fuel and oil expense and profit sharing (cents).

The Company has also provided its calculation of return on invested capital, which is a measure of financial performance used by management to evaluate its investment returns on capital. Return on invested capital is not a substitute for financial results as reported in accordance with GAAP and should not be utilized in place of such GAAP results. Although return on invested capital is not a measure defined by GAAP, it is calculated by the Company, in part, using non-GAAP financial measures. Those non-GAAP financial measures are utilized for the same reasons as those noted above for Net loss, non-GAAP and Operating loss, non-GAAP. The comparable GAAP measures include charges or benefits that are deemed "special items" that the Company believes make its results difficult to compare to prior periods, anticipated future periods, or industry trends, and the Company’s profitability targets and estimates, both internally and externally, are based on non-GAAP results since "special items" cannot be reliably predicted or estimated. The Company believes non-GAAP return on invested capital is a meaningful measure because it quantifies the Company's effectiveness in generating returns relative to the capital it has invested in its business. Although return on invested capital is commonly used as a measure of capital efficiency, definitions of return on invested capital differ; therefore, the Company is providing an explanation of its calculation for non-GAAP return on invested capital in the accompanying reconciliation in order to allow investors to compare and contrast its calculation to the calculations provided by other companies.

Liquidity and Capital Resources

Net cash provided by operating activities was $860 million for the three months ended March 31, 2025, compared with $104 million used in operating activities in the same prior year period. Historically, operating cash inflows are primarily derived from selling tickets for future flights and providing air transportation to Customers. The vast majority of tickets are purchased prior to the day on which travel is provided and, in some cases, several months before the anticipated travel date. Operating cash outflows are related to the recurring expenses of airline operations. The operating cash flows for the three months ended March 31, 2025, were largely impacted by the Company's net results (as adjusted for noncash items, primarily Depreciation and amortization), a $103 million profit-sharing contribution for 2024 pursuant to the Company's Retirement Savings Plan, and a $660 million increase in Air traffic

liability driven by seasonal bookings for future travel. The operating cash flows for the three months ended March 31, 2024, were largely impacted by the Company's net results (as adjusted for noncash items, primarily Depreciation and amortization), a $1.35 billion outflow due to contract ratification bonuses paid to the Company's Pilots as a result of ratifying a new labor contract in January 2024, a $105 million payout of the Company's ProfitSharing Plan contribution for 2023, and a $51 million decrease related to the purchase of fuel derivative instruments, which is included within Other, net operating cash flows in the accompanying unaudited Condensed Consolidated Statement of Cash Flows, partially offset by a $1.1 billion increase in Air traffic liability driven by seasonal bookings for future travel and higher ticket sales related to an increase in capacity. Net cash provided by operating activities is primarily used to finance capital expenditures, repay debt, provide Shareholder returns, and provide working capital.

Net cash provided by investing activities totaled $623 million during the three months ended March 31, 2025, compared with $585 million used in investing activities in the same prior year period. Investing activities in both years included Capital expenditures and changes in the balance of the Company's short-term and noncurrent investments. During the three months ended March 31, 2025, Capital expenditures were $501 million, compared with $583 million in the same prior year period. Capital expenditures decreased, year-over-year, largely due to a decrease in average progress payment balances for scheduled future aircraft deliveries during the three months ended March 31, 2025, compared to the same prior year period.

The Company continues to expect its 2025 capital spending to be in the range of $2.5 billion to $3.0 billion, which does not include the impact of potential future fleet transactions. These transactions could lower the Company's net capital spending if executed.

Net cash used in financing activities was $858 million during the three months ended March 31, 2025, compared with $232 million used in financing activities for the same prior year period. During the three months ended March 31, 2025, the Company paid $107 million in cash dividends to Shareholders related to the fourth quarter 2024 declaration. The first quarter 2025 dividend declaration of $103 million was paid in April 2025. Additionally, the Company repurchased $750 million of the Company's outstanding common stock through authorized share repurchases during the three months ended March 31, 2025. The repurchases of common stock amounts in the Consolidated Statement of Cash Flows may differ from the Consolidated Statement of Stockholder's Equity due to the timing of excise taxes incurred and subsequent payment on share repurchases, net of issuances. The Company may engage in early debt repurchases from time to time at its discretion; however, any early future repurchases are not included in the Company's current maturities of long-term debt unless otherwise disclosed. During first quarter 2025, the Company made the decision to prepay the first Payroll Support Program Loan in advance of the fifth anniversary date of April 20, 2025. As a result, the balance as of March 31, 2025, is classified as Current maturities of long-term debt in the accompanying unaudited Condensed Consolidated Balance Sheet. See Note 10 to the unaudited Condensed Consolidated Financial Statements for further information on the Payroll Support Program Loan and future debt maturities. During the three months ended March 31, 2024, the Company paid $215 million in cash dividends to Shareholders for the fourth quarter 2023 and first quarter 2024 declarations. Additionally, the Company repaid $8 million in finance lease obligations.

The Company repurchased $750 million of its outstanding common stock through an accelerated share repurchase program entered into in first quarter 2025 under its current $2.5 billion authorization, which also impacted net cash used in financing activities. The Company received a total of 24,109,817 million shares under the first quarter 2025 accelerated share repurchase program, which was completed in April 2025. These purchases were recorded as treasury share repurchases for purposes of calculating earnings per share. On March 11, 2025, the Company announced its intention to launch an additional $1.5 billion accelerated share repurchase program in second quarter 2025, and expects the program to be completed by the end of July 2025.

The Company is a "well-known seasoned issuer" and currently has an effective shelf registration statement registering an indeterminate amount of debt and equity securities for future sales. The Company currently intends to use the proceeds from any future securities sales off this shelf registration statement for general corporate purposes.

The Company has access to $1.0 billion under its amended and restated revolving credit facility (the "Amended Credit Agreement"), which expires in August 2028. For the three months ended March 31, 2025 and 2024 there were no amounts outstanding under the Amended Credit Agreement. See Note 10 to the unaudited Condensed Consolidated Financial Statements for further information.

As of March 31, 2025, the Company carried a working capital deficit of approximately $3.2 billion, in which its current liabilities exceed its current assets. This is common within the airline industry and is primarily due to the nature of the Air traffic liability account, which is related to advance ticket sales, unused flight credits available to Customers, and loyalty deferred revenue, which are performance obligations for future Customer flights, do not require future settlement in cash, and are mostly nonrefundable. See Note 5 to the unaudited Condensed Consolidated Financial Statements for further information.

The Company believes it has various options available to meet its capital and operating commitments, including unrestricted cash and short-term investments of $8.3 billion as of March 31, 2025, and anticipated future internally generated funds from operations. The Company continues to have a large base of unencumbered aircraft and primarily aircraft-related assets with a net book value of approximately $16.3 billion. In addition, the Company continues to maintain investment-grade credit ratings by all three major credit agencies (Moody's, S&P Global, and Fitch).

As of April 24, 2025, for the years 2025 through 2031, the Company has firm orders with Boeing for 504 aircraft (less 11 -8 aircraft received to date in 2025), and options for an additional 168 aircraft. The contractual order book as of April 24, 2025 does not include the impact of delivery delays and is subject to change based on ongoing discussions with Boeing and their production capability. See Note 9 to the unaudited Condensed Consolidated Financial Statements for further information.

The following table details information on the aircraft in the Company's fleet as of March 31, 2025:

												Average Age (Yrs)						Number of Aircraft						Number Owned						Number Leased
Type						Seats
737-700						143						19						341						318						23
737-800						175						10						203						154						49
737-8						175						3						256						227						29
Totals												11						800						699						101

Critical Accounting Policies and Estimates

For information regarding the Company’s Critical Accounting Policies and Estimates, see the "Critical Accounting Policies and Estimates" section of "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Cautionary Statement Regarding Forward-Looking Statements

This Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 ("Exchange Act"). Forward-looking statements are based on, and include statements about, the Company's estimates, expectations, beliefs, intentions, and strategies for the future, and the assumptions underlying these forward-looking statements. Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, statements related to the following:

• the Company’s financial targets for 2025 and 2026 and factors that could impact the Company’s financial results;

• the Company’s financial guidance for second quarter 2025 and factors that could impact the Company’s financial results;

• the Company’s capacity guidance and expectations;

• the Company’s estimated fuel costs and fuel efficiency and the assumptions underlying the Company’s fuel-related expectations and estimates, including expectations related to the Company’s fuel derivative contracts;

• the Company’s plans and expectations for the repayment of debt and its interest expense;

• the Company’s focus areas, goals, opportunities, and initiatives, including with respect to flight credit expiration, checked bag fees, cost reductions and efficiencies, loyalty program optimization, the Company’s fare structure, financial performance, and the Company’s co-brand credit card agreement with Chase Bank;

• the Company’s plans and expectations with respect to assigned and premium seating, cabin design and seating, redesigned boarding model, aircraft turn times, and redeye flying;

• the Company’s fleet plans and expectations, including with respect to fleet modernization, fleet retrofits, fleet utilization, flexibility, fleet strategy and extracting value from the fleet and the fleet order book, and expected fleet deliveries and retirements, and underlying expectations and dependencies;

• the Company’s plans and expectations with respect to capital allocation, capital deployment, infrastructure investments, leverage, and Shareholder returns;

• the Company’s labor plans and expectations including with respect to the Company’s reduction in force;

• the Company’s financial targets and goals, including with respect to balance sheet goals and cost mitigation;

• the Company’s expectations regarding revenue management, passenger demand, revenue trends, and bookings;

• the Company’s short-term and long-term financial and operational goals, including with respect to increasing efficiency and creating a leaner and more agile organization;

• the Company’s cash flow expectations and capital spending guidance, in particular with respect to aircraft capital expenditures and underlying aircraft delivery expectations;

• the Company’s expectations with respect to its ability to meet its ongoing capital and operating commitments, including underlying assumptions and factors that could impact this ability;

• the Company's assessment of market risks; and

• the Company's plans and expectations related to legal and regulatory proceedings.

While management believes these forward-looking statements are reasonable as and when made, forward-looking statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed in or indicated by the Company's forward-looking statements or from historical experience or the Company's present expectations. Factors that could cause these differences include, among others:

• the impact of consumer perception, consumer uncertainties with respect to trade policies (including the imposition of tariffs), economic conditions, banking conditions, fears or actual outbreaks of diseases, extreme or severe weather and natural disasters, actions of competitors (including, without limitation, pricing, scheduling, capacity, and network decisions, and consolidation and alliance activities), socio-demographic trends, and other factors beyond the Company's control on consumer behavior and the Company's results of operations and business decisions, plans, strategies, and results;

• the Company's ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives;

• the Company's dependence on Boeing, Boeing’s suppliers, and the FAA with respect to the Company's fleet plans and deliveries, capacity and operational plans, assigned and premium seating plans, and other operational plans, strategies, and goals;

• consumer behavior and response with respect to the Company's new commercial products and policies;

• the impact of labor and hiring matters on the Company’s business decisions, plans, strategies, and results;

• the impact of fuel price changes, fuel price volatility, volatility of commodities used by the Company for hedging jet fuel, and any changes to the Company’s fuel hedging strategies and positions on the Company's business plans and results of operations;

• the Company's dependence on other third parties, in particular with respect to its technology plans, its plans and expectations related to operational excellence and reliability, fuel supply, maintenance, environmental sustainability, Global Distribution Systems, and the impact on the Company's operations and results of operations of any third party delays or non-performance;

• the Company's ability to obtain and maintain adequate infrastructure and equipment to support its operations and initiatives;

• the impact of governmental regulations and other governmental actions on the Company's plans, strategies, financial results, and operations;

• the Company's dependence on its workforce, including its ability to employ and retain sufficient numbers of qualified Employees to effectively and efficiently maintain its operations;

• the impact of fears or actual acts of terrorism or war, political instability, cyber-attacks, and other factors beyond the Company’s control on the Company’s plans, financial results, operations, and ability to adequately insure against risks;

• the cost and effects of the actions of activist shareholders; and

• other factors as set forth in the Company's filings with the Securities and Exchange Commission (the "SEC"), including the detailed factors discussed under the heading “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Caution should be taken not to place undue reliance on the Company's forward-looking statements, which represent the Company's views only as of the date this report is filed. The Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events or otherwise.