Higher fares, more full seats help push Southwest Airlines to record 2Q profit of $465 million
DALLAS (AP) -- Southwest Airlines is reporting a record profit for the second quarter, more than doubling its earnings from a year ago.
The company said it set records for passenger fares per mile and the percentage of seats sold on its planes during the April-to-June period. It said that bookings in July have been strong, with passengers paying about 3 percent more per mile than in July 2013.
Southwest Airlines Co. is in the midst of several big changes, including phasing out the AirTran Airways brand, starting international flights on Southwest, and expansion in Dallas and other key markets.
The Dallas-based company said Thursday that second-quarter net income rose to $465 million, or 67 cents per share, compared with $224 million, or 31 cents per share, a year earlier.
Excluding special items, the airline said it would have earned 70 cents per share. That beat Wall Street's forecast of 61 cents per share, according to FactSet.
Revenue climbed 8 percent to $5.01 billion, topping analysts' forecast of $4.94 billion.
Southwest said that passenger revenue per available seat mile, a closely watched number in the airline business, rose 9 percent, a sign that customers are paying higher average fares. Despite the higher prices, Southwest and AirTran filled 83.9 percent of seats on the average flight, up from 81.6 percent a year earlier.
The company caught a break at the fuel pump. Spending on fuel dropped 4 percent to $1.4 billion. Labor spending, however, rose 8 percent, also to $1.4 billion.
Its shares slipped 4 cents to $28.87 in morning trading.