DALLAS – More passengers and lower fuel prices are pushing Southwest Airlines to record profits, and the airline expects an even bigger break at the gas pump this winter.
CEO Gary Kelly says the trend toward higher revenue has continued into October, and bookings for November and December look good.
Southwest Airlines Co. said Thursday that net income rose 27 per cent to $329 million , or 48 cents per share, in the July-to-September quarter.
Excluding one-time items such as the falling value of some fuel-hedging contracts, the profit would have been 55 cents per share. On that basis, analysts expected 53 cents per share, according to FactSet.
Revenue rose 5.6 per cent to $4.80 billion, a tick better than analysts’ forecast of $4.79 billion.
The average one-way fare inched higher — to $160.74, an increase of $1.35 from last summer. Passengers flew 5.6 per cent more miles, and planes carried record loads — the average flight was 84.4 per cent full, an increase from 80.8 per cent the year before.
Southwest spent $2.94 per gallon on fuel in the third quarter, down from $3.06 a year earlier. And the discount will grow — the airline predicted that it will pay between $2.70 and $2.75 per gallon in the fourth quarter.
Fuel spending dropped 4.4 per cent in the third quarter, but labour costs rose 7.2 per cent.
Southwest Airlines shares rose 85 cents, or 2.5 per cent, to $35.05 in premarket trading shortly before the market opening.