Mgmt Mtg Takes: Transformation Underway in TX with $4+ EPS the Magic Number

Research evidence excerpt

Mgmt Mtg Takes: Transformation Underway in TX with $4+ EPS the Magic Number

n Q1 and 25% y-o-y in March (growing toward legacy network mix of ~40%+ of sales), Quarters of Y-o-Y Declines...

w/ similar growth rates maintained in April & May. Mgmt notes it is increasingly confident that the 90.0%

85.0%backdrop of sticky fare increases, industry discipline & exits, and stable-ish fuel supports the ability 83.4%82.6%

80.7%81.2%79.8%

78.5%to achieve >$4/sh of EPS in '26 if demand remains resilient into off-peak. 80.0% 77.6%78.3% 78.2%79.2%77.2% Factor

Load 75.0% 73.9%74.1%

Optimizing the Network & Growing Frequencies at Favorable Econs. LUV began re-banking its 70.0%

larger airports earlier this year to build connecting itineraries & sees a HSD number of growth / share 65.0%

markets that have strong local demand & favorable economics where LUV can add frequencies Q1 2023 2024Q2 2025 2026Q3 Q4

to underserved markets and to markets that have greater corporate appeal w/ the cabin changes. .Source: Company data, Jefferies estimates

Target growth markets include San Diego, Nashville, Phoenix, Las Vegas, Orlando, Knoxville, &

Tampa. LUV has advance hired pilots (395 hired in YTD:26 vs 187 in 2025) ahead of need to reduce Exhibit 2 - ... w/ LUV RASM Outpacing Peers

by 4pts on FY26 Basis as Initiatives Rampbottlenecking in the future, but forced retirements allow for natural attrition to drive balance as

needed. On avg, LUV has expanded share by 4pts in H1:2026 vs. 2014 (Ex 12). 20.0% 18.2% 16.4%

15.0%

%) 11.1% 12.2% 12.8% 14.0%11.0% 15.0%11.0%

Leveraging the Order Book & Eyeing What's Next. There is potential over time to build a pond- 10.0% 7.6% (Y-o-Y

hopping footprint that would likely require WBs. LUV plans 66 MAX-8 deliveries in '26 vs 60 RASM 5.0%