Southwest Airlines Co reported a higher quarterly profit on Thursday on better revenue, even as rising fuel costs boosted operating expenses.

The discount carrier, which plans to acquire rival AirTran Holdings Inc to expand in U.S. East Coast markets, said net income came to $131 million, or 18 cents a diluted share, in the fourth quarter. That compared with a year-earlier profit of $116 million, or 16 cents a share.

Fuel and oil costs rose 18 percent in the quarter.

(Reporting by Karen Jacobs, editing by Gerald E. McCormick)