Skip to main content
Advertising

Originally published January 23, 2014 at 6:34 AM | Page modified January 23, 2014 at 1:41 PM

  • Share:
           
  • Comments (0)
  • Print

Southwest's 4Q profit rises on lower fuel spending

Southwest Airlines Co. made more money in the fourth quarter thanks to a lower fuel bill and higher average fares.


AP Airlines Writer

Most Popular Comments
Hide / Show comments
No comments have been posted to this article.
Start the conversation >

advertising

DALLAS —

Southwest Airlines Co. made more money in the fourth quarter thanks to a lower fuel bill and higher average fares.

That combination boosted net income for the final three months of 2013 to $212 million from $78 million a year earlier.

Southwest's results topped Wall Street expectations, and the company said that a key revenue figure for the first quarter would be higher than a year ago.

Still, the airline's shares fell 53 cents, or 2.4 percent, to close at $21.24. Most U.S. airline stocks fell after United Airlines gave a lackluster revenue forecast. In the past year, Southwest shares have gained 87 percent, however. Investors have been drawn to airlines, which have boosted profits with help from stable fuel prices and nearly-full planes.

Southwest paid 30 cents less per gallon in the fourth quarter, cutting its fuel bill by $138 million, or 9.2 percent. Meanwhile, the average fare on Southwest rose $8, or 5.4 percent, to $156.05 each way.

Southwest officials said fares rose because the average customer's trip was longer and the airline sold fewer seats at sale prices.

"We're not sitting here hoping that we can raise fares," CEO Gary Kelly said on a call with analysts and reporters. He called Southwest's fare hikes "very modest, very infrequent and very judicious."

In recent years, airlines have limited the number of flights, which helps them fill seats without slashing prices. But industry-wide fare increases have slowed -- there were just two in 2013, compared with seven in 2012 and nine in 2011, when airlines were offsetting rising fuel costs.

Kelly said travel bookings are strong for the first quarter. Southwest predicted that revenue for every seat flown one mile -- a key measure in the airline business called unit revenue -- will be higher in the first quarter than it was in the same period last year.

Southwest, which also operates AirTran Airways, earned 30 cents per share in the fourth quarter, compared with 11 cents per share a year earlier.

Excluding special items, Southwest said it earned 33 cents per share. Analysts were expecting 29 cents per share, according to a FactSet survey. Revenue of $4.43 billion topped analysts' forecast of $4.39 billion.

Southwest's labor costs rose 7.3 percent due to profit sharing and raises to put AirTran employees on par with pay at Southwest.

This figures to be an important year at Southwest. The airline will begin international flights as it takes over routes to the Caribbean and Latin America now operated by AirTran. Southwest will announce routes and fares for the first international flights in the next few days.

Also, Southwest is poised to grow at home this fall when a federal law limiting flights from Dallas Love Field expires. That law, passed in the 1970s, was designed to protect nearby Dallas-Fort Worth International Airport, a hub for American Airlines. Finally, Southwest looks to complete the job of folding AirTran into the Southwest brand, which company officials say will eliminate redundant costs.

___

Follow David Koenig at http://www.twitter.airlinewriter



News where, when and how you want it

Email Icon

Want free career advice? And an iPad Mini?

Want free career advice? And an iPad Mini?

Tell us about your goals and challenges and be considered for a future NWjobs career-makeover story, as well as a chance to win an iPad Mini!

Advertising

Advertising

The Seattle Times Historical Archives

Browse our newspaper page archives from 1900-1984


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►