Southwest Airlines squeezed USD 379m of operating profit out of its summer

Southwest finally made its planes pay for themselves

Southwest built its name on cheap, frequent flights between American cities. Between July and September 2026 its revenue reached USD 8.4bn, against USD 6.9bn in the same quarter of 2025. That is a healthy rise. The real story sits lower down. Operating profit jumped from USD 35.0m to USD 379m, up 982.9%. Net profit went from USD 54.0m to USD 270m.

The mechanism is simple. An airline pays for its planes, hangars and crews whether the seats are full or not. Depreciation, the annual cost of wearing out those planes, barely moved: USD 394m a year earlier, USD 398m now. So much of the extra revenue fell almost straight to profit. Operating profit before depreciation (EBITDA) rose 81.1% to USD 777m.

Here is the turn. Even after this jump, the quarter's depreciation was still bigger than its operating profit. In plain terms, a much better summer for Southwest earned less than its fleet lost in value over the same months. I would call it a recovery in progress, not a finished one.

AirExplore flies with more debts than assets

AirExplore is the Slovak charter airline that takes holidaymakers from Central European airports to the beach, usually on behalf of tour operators. In 2025 its revenue slipped to EUR 109m, from EUR 118m a year earlier. The operating loss widened to EUR -23.5m, from EUR -8.5m.

The balance sheet tells the harder story. Equity, what would be left for the owners if every asset were sold and every debt paid, stood at EUR -33.5m. A year earlier it was EUR -11.1m. Against total assets of EUR 38.2m, that gives an equity ratio of -87.7%, down 62.2 pp. A negative figure means the company owes more than everything it owns.

This is not just a fleet getting old. Before depreciation, the loss was still EUR -22.2m, so the flying itself cost more than it brought in. Cash did rise, to EUR 3.2m from EUR 819k, but the accounts do not show who supplied it. A charter airline in this position keeps flying because someone, an owner or a lender, keeps backing it. I would watch that backing more closely than any summer schedule.

Lockheed Martin's cash pile grew faster than its profit

Lockheed Martin builds fighter jets, missiles and satellites, mostly for governments with long contracts and longer memories. In the third quarter of 2026 revenue reached USD 20.7bn, against USD 18.6bn a year earlier. Net profit rose 14.0% to USD 1.8bn.

Cash moved more sharply. It rose 71.8% to USD 6.0bn, from USD 3.5bn. Equity climbed to USD 10.1bn, from USD 6.2bn, so the equity ratio improved by 5.3 pp to 15.6%. That ratio shows how much of the company is funded by its owners rather than by lenders and other creditors. It is still a thin cushion: most of the USD 64.5bn of assets is financed by others.

For a defence contractor, thin equity is less alarming than it would be for an airline, because the customers rarely disappear. This quarter leaves Lockheed on firmer footing, though nowhere near a fortress.

Dalekovod's Norwegian branch grew into a much bigger business

Dalekovod NUF is registered in Norway as a foreign company's branch (NUF is the Norwegian legal form for exactly that). Its revenue sat at NOK 235m in 2023 and NOK 256m in 2024. In 2025 it rose 147.4% to NOK 634m.

Profit grew faster still. Operating profit rose 188.0% to NOK 42.1m, from NOK 14.6m. Net profit climbed 249.6% to NOK 30.6m, from NOK 8.8m. When profit outruns revenue like this, the business is spreading its overheads, the office, the managers, the equipment, over much more work.

Project businesses can swing from year to year, and one strong year does not make a trend. But the step from a flat 2023 and 2024 to this 2025 is a clear change in scale.

Quadrature Capital now runs a bigger balance sheet on a smaller owners' share

Quadrature Capital is a London trading firm that relies on mathematical models rather than gut feeling. In the year to January 2026 its revenue rose 79.9% to GBP 2.2bn, from GBP 1.2bn. Cash climbed 154.7% to GBP 173m.

Equity went the other way: down to GBP 212m, from GBP 308m. The equity ratio fell by 22.7 pp to 32.7%. The accounts do not show how much of the year's result went back to the owners. What they do show is that a bigger balance sheet now rests on a smaller owners' share. For a firm that lives on market risk, I would not call that a problem, but I would call it a choice.

Åpent Bakeri's costs rose faster than its bread sales

Åpent Bakeri is an Oslo bakery chain. Its revenue rose for a second year: NOK 200m in 2023, NOK 217m in 2024, NOK 248m in 2025. Operating profit, however, fell 63.1% to NOK 3.9m, from NOK 10.6m. Net profit dropped to NOK 3.4m.

Cash fell 82.2% to NOK 4.0m, from NOK 22.5m. A bakery's costs, flour, staff, rent, rise with every new shop and every early shift. Here they rose faster than sales. The accounts do not show whether the money went into new shops or into dearer ingredients and wages. Either way, the cushion is now thin for a business that pays its bakers every month.

A fire service that stopped losing money

Midt-Hedmark brann- og redningsvesen is the fire and rescue service around Elverum in eastern Norway, run as an IKS, a company owned jointly by several municipalities. Its revenue grew from NOK 88.7m in 2023 to NOK 95.2m in 2024 and NOK 103m in 2025. Operating profit swung from a loss of NOK -2.4m to a surplus of NOK 8.3m. The operating margin moved from -2.5% to 8.0%, a change of 10.5 pp.

A fire service is not meant to make money. A surplus simply means the municipalities paid in more than the year cost. After a loss year, that looks like a correction rather than a windfall.

The week's pattern: fixed costs decide who keeps the money

There is a thread this week, and it is an old one. At Southwest, Dalekovod and the Elverum fire service, profit rose much faster than revenue, the sign of a cost base that did not keep pace with sales. Åpent Bakeri shows the reverse: more sales, but costs that grew even faster. AirExplore shows what happens when revenue shrinks while the planes and crews stay.

Anyone running a business can test this in their own books: how much of next year's cost is already committed before the first customer walks in? The higher that share, the harder each good or bad year hits. My verdict on the week: the winners did not sell cleverly, they filled what they had already paid for.