Southwest profit up on higher fares, cheaper fuel - New York News

Southwest profit up on higher fares, cheaper fuel

Posted: Updated:

By DAVID KOENIG
AP Airlines Writer

DALLAS (AP) - Average fares are rising on Southwest Airlines Co., the fuel bill is shrinking, and profit is soaring.

The airline is gearing up for the holiday travel season, and officials say that bookings for November and December are strong.

Southwest's results are adding detail to the emerging picture of an airline industry that is continuing to rebound from the 2008 recession. Mergers have reduced the number of competitors, and the remaining airlines are boosting fares by controlling growth and limiting seats.

Southwest said Thursday that third-quarter net income jumped to $259 million, or 37 cents per share, from $16 million, or 2 cents per share, a year earlier.

Excluding special items such as fuel-hedging and costs of folding AirTran Airways into Southwest, the company said it would have earned 34 cents per share. That matched analysts' forecast of adjusted profit.

Revenue rose 5.5 percent to a record $4.55 billion. Analysts were expecting $4.54 billion, according to FactSet.

The average one-way fare on Southwest increased 11.3 percent, to $159.39. Partly that could reflect longer flights - the average trip was 1,000 miles, an increase of 41 miles or 4.3 percent.

The airline is also getting a break on fuel. It paid a few cents less per gallon and consumed 12 million fewer gallons of fuel than a year ago. The combination reduced Southwest's biggest expense by 5.1 percent, to $1.45 billion.

That was helpful because the second-largest expense, labor, rose 6.9 percent to $1.27 billion.

The third quarter includes the last two months of the busy summer travel season, so it's a strong period for airlines. Even with higher fares than last year, Southwest was able to fill 80.8 percent of its seats, although that was down from 82.1 percent in summer 2012.

When summer vacations end, travel drops off in the fall and winter, but Southwest is hinting at a busy holiday season. Chairman and CEO Gary Kelly said the recent partial government shutdown affected revenue but added that bookings for November and December were strong.

Kelly called the third-quarter results "very solid," and said that his airline - once known as a scrappy underdog to the giants, but now the fourth-biggest U.S. carrier - was transforming itself for the future.

Southwest is converting more AirTran flights to its own colors and brand, and expects to fully absorb AirTran by the end of 2014. The conversion includes using Southwest planes on international flights beginning next year.

In trading before the stock market's opening, Southwest shares were up 34 cents, or 2.1 percent, to $16.75.

Copyright 2013 The Associated Press modified.

Didn't find what
you were looking for?

  • Local NewsLocal NewsMore>>

  • Friday Night Live: August 22, 2014

    Friday Night Live: August 22, 2014

    Friday, August 22 2014 10:34 PM EDT2014-08-23 02:34:20 GMT
    This is Fox 5's Friday Night Live, a weekly celebration of the end of the work week. All summer long, the Fox 5 team brings you the latest in entertainment, nightlife, food, and music in our area. In this episode: Ace Frehley, Big Sean, Week End Trends, and Chef Luca Manfé of MasterChef.
    This is Fox 5's Friday Night Live, a weekly celebration of the end of the work week. All summer long, the Fox 5 team brings you the latest in entertainment, nightlife, food, and music in our area. In this episode: Ace Frehley, Big Sean, Week End Trends, and Chef Luca Manfé of MasterChef.
  • Berg'n: new beer and food hall in Brooklyn

    Berg'n: new beer and food hall in Brooklyn

    Friday, August 22 2014 10:00 PM EDT2014-08-23 02:00:35 GMT
    The guys behind the Brooklyn Flea and Smorgasburg are at it again with a new food and booze venue called Berg'n, a new beer hall in Crown Heights. The place doesn't officially open until August 27, 2014, but owners Eric Demby and Jonathan Butler are giving it a test run for special guests, family, and the press.
    The guys behind the Brooklyn Flea and Smorgasburg are at it again with a new food and booze venue called Berg'n, a new beer hall in Crown Heights. The place doesn't officially open until August 27, 2014, but owners Eric Demby and Jonathan Butler are giving it a test run for special guests, family, and the press.
  • Giving your college-bound kids their space

    Giving your college-bound kids their space

    Friday, August 22 2014 9:31 PM EDT2014-08-23 01:31:50 GMT
    Going off to college is an exciting time for the entire family, especially for the upcoming freshman. But with technology, parents can be in touch all the time. What's too much and what's just enough? Freshman move-in day seems to be harder on the parents than the students at Stony Brook University.
    Going off to college is an exciting time for the entire family, especially for the upcoming freshman. But with technology, parents can be in touch all the time. What's too much and what's just enough? Freshman move-in day seems to be harder on the parents than the students at Stony Brook University.
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices