- FILE - In this April 6, 2011 file photo, a Southwest Airlines aircraft taxies at …
DALLAS (AP) — Southwest Airlines Co. is making money even with higher fuel prices, thanks to full planes and rising fares.
The airline expects strong revenue in the first quarter too, based on passenger-booking trends, says CEO Gary C. Kelly.
Southwest said Thursday that it earned $152 million in the fourth quarter, up from $131 million a year earlier.
The increase, however, came entirely from gains on fuel-hedging contracts. Without those one-time gains, Southwest would have earned $66 million, or 9 cents per share, down from adjusted income of $115 million, or 15 cents per share, a year earlier.
Still, the results beat analysts' prediction of 8 cents per share, according to FactSet.
With the addition of AirTran Airways, which Southwest bought last year, revenue jumped to $4.11 billion, just below analysts' forecast of $4.12 billion.
Southwest paid $1.4 billion for AirTran, which allowed it to expand into Atlanta, Mexico and the Caribbean, but it said Thursday that the cost of combining the two airlines will end up at $500 million. The company said it saved $80 million in overlapping expenses in 2011 and expects the annual savings to go much higher.
Southwest carries more passengers in the U.S. than any airline, and it's the first to report fourth-quarter results, so its profit is likely to be seen as a precursor to figures from other carriers that report next week.
Fuel costs have weighed on the airlines, but they were able to offset that by raising fares repeatedly in 2011.
The average passenger on Southwest paid a fare of $140.18 in the fourth quarter, a 7 percent increase from a year earlier.
Southwest paid 34 percent more at the pump to fill its fleet of Boeing 737s, however. Fuel averaged $3.29 per gallon, up from $2.46 a year earlier, and Southwest's final fuel tab came to $1.49 billion.
And there's no relief in sight. Southwest expects to spend $3.35 per gallon in the first quarter, up from $2.95 per gallon in same period last year.
The airline expects strong revenue in the first quarter too, based on passenger-booking trends, says CEO Gary C. Kelly.
Southwest said Thursday that it earned $152 million in the fourth quarter, up from $131 million a year earlier.
The increase, however, came entirely from gains on fuel-hedging contracts. Without those one-time gains, Southwest would have earned $66 million, or 9 cents per share, down from adjusted income of $115 million, or 15 cents per share, a year earlier.
Still, the results beat analysts' prediction of 8 cents per share, according to FactSet.
With the addition of AirTran Airways, which Southwest bought last year, revenue jumped to $4.11 billion, just below analysts' forecast of $4.12 billion.
Southwest paid $1.4 billion for AirTran, which allowed it to expand into Atlanta, Mexico and the Caribbean, but it said Thursday that the cost of combining the two airlines will end up at $500 million. The company said it saved $80 million in overlapping expenses in 2011 and expects the annual savings to go much higher.
Southwest carries more passengers in the U.S. than any airline, and it's the first to report fourth-quarter results, so its profit is likely to be seen as a precursor to figures from other carriers that report next week.
Fuel costs have weighed on the airlines, but they were able to offset that by raising fares repeatedly in 2011.
The average passenger on Southwest paid a fare of $140.18 in the fourth quarter, a 7 percent increase from a year earlier.
Southwest paid 34 percent more at the pump to fill its fleet of Boeing 737s, however. Fuel averaged $3.29 per gallon, up from $2.46 a year earlier, and Southwest's final fuel tab came to $1.49 billion.
And there's no relief in sight. Southwest expects to spend $3.35 per gallon in the first quarter, up from $2.95 per gallon in same period last year.
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