Southwest Airlines Co. did better than most other airlines in the first quarter, as increased revenue and fuel hedging allowed it to beat earnings expectations and post a $34 million, or 5 cents a share, profit for the quarter.
The Dallas-based airline said its first-quarter earnings were down sharply from $93 million, or 12 cents per share, a year ago. The carrier said that due to the continued increase in jet fuel prices, it has been forced to reduce its fleet growth plans in 2009.Excluding fuel hedges, earnings rose to 6 cents a share from 4 cents.
Analysts polled by Thomson Financial had expected earnings, excluding items, of 1 cent a share on revenue of $2.49 billion.
First-quarter revenue rose 15 percent to $2.53 billion from $2.2 billion in the year-earlier period.
Benefiting from the Easter shift to March this year (versus April last year), this was the best quarterly performance since second quarter 2006, said CEO Gary Kelly in a statement.
Southwest is the dominant carrier at Baltimore/Washington International Thurgood Marshall Airport, carrying 53 percent of its passengers.
The carrier said it benefited from revenue initiatives and an early Easter, which all contributed to a revenue per available seat mile increase of 8.2 percent, which is the best since the second quarter of 2006.
Looking ahead, the company said second-quarter bookings are strong. The company plans to add 29 Boeing 737-700s this year and will add no more than 14 737-700 aircraft in 2009, instead of 28 planes as previously planned.
The week has been a busy one for the airline industry with Delta and Northwest announcing its merger in a deal that will create the world's biggest carrier, a position now held by AMR's American. Speculation has also been become rife as to whether other airlines will join forces, such as Continental and UAL's United.