Southwest shrugs off fuel rise with improved net income
Southwest Airlines, the low-cost Dallas-based airline, boosted its net income 192 percent to $76 million in the first quarter, from $26 million, despite the surge in fuel prices that is taxing the international airline industry.
For the first quarter, Southwest’s fuel and oil expenses increased 21 percent to $279 million, compared to $230 million in the same quarter 2004. But its operating income reached $106 million in the latest quarter, up 130 percent from $46 million in the first quarter 2004.
“Considering the many challenges our industry continues to face, we are grateful to report first quarter 2005 earnings of $76 million,” said Gary C. Kelly, Southwest’s chief executive officer. “Our rigorous focus on cost reduction and successful fuel hedging program shielded us from record high energy prices and enabled us to report our 56th consecutive quarter of profitability.”
The airline’s first quarter operating revenues increased 12 percent to $1.66 billion, from $1.48 billion for the first quarter of 2004. Freight revenues jumped 36 percent to $34 million from $25 million.
Southwest’s shares closed up 8 cents (or 0.8 percent) at $14.72 Wednesday on the New York Stock Exchange.