Profits up 41% at Southwest
In a rare departure from downbeat industry news, Southwest Airlines Co. reported a second quarter profit rise of 41% compared to a year ago.
It marked the 57th quarter or profitability since 1991, according to Southwest officials.
The airline said air fare increases helped offset a 25% rise in fuel costs.
Extensive purchasing of contracts that lock in pre-arranged prices of crude and heating oil helped the low-cost airline shrug off record oil prices that have pushed most of its rivals into the red, analysts said.
CEO Gary C. Kelly said:
“Although we remain well-hedged, our employees understand that we must be prepared for higher fuel costs, and they are working harder than ever to reduce our cost structure through increased productivity.”
Mr Kelly said even greater profits were in reach for next year. But he cautioned that scenario would depend on continued strong demand for air travel and the performance of the US economy.
The discount carrier said cash on hand — a key health measure for airlines — stood at $2.3 billion at the end of the quarter, plus a $575 million unsecured revolving line of credit.
Report by David Wilkening
David
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