Thursday, April 21, 2011

Southwest reports first quarter earnings and a May 2 target for DOJ approval of AirTran purchase

Southwest Airlines 737-7BX (30744/989) N552WN, ex Virgin Blue VH-VBQ taxies at John Wayne Orange County Airport (SNA/KSNA) on April 10, 2011.
(Photo by Michael Carter)

Southwest says it eked out a profit for the first quarter, adding that it expects its merger with AirTran to close in less than two weeks.

The nation's largest low-cost carrier reported earnings of $5 million for the January-to-March quarter, saying growing passenger numbers and fare increases helped it narrowly stay ahead of rising fuel costs.

The Associated Press writes Southwest's profit came out to "a penny per share." The Fort Worth Star-Telegram adds "excluding one-time accounting items such as 9 million in charges related to consulting fees for its AirTran purchase, Southwest posted a profit of $20 million, or 3 cents per share, matching Wall Street analysts' earnings expectations."

As for the AirTran deal, CEO Gary Kelly says he expects Southwest's acquisition of the carrier to close on May 2.

"We anticipate that all regulatory approvals needed to move forward will be obtained by that date," Kelly says in a release detailing Southwest's earnings report. "We look forward to that milestone day, first and foremost, to finally welcome the AirTran Crew Members to the Southwest family. Together, we can then begin the exciting work to integrate AirTran into Southwest."

The Dallas Morning News notes the airlines need "approval from the U.S. Department of Justice's antitrust division," though most industry observers do not expect that to tie up the deal.

As for passenger and fare figures, The Wall Street Journal notes that Southwest's "passenger revenue per available seat mile increased 8.7%, as the average seat price grew 11%. … Earlier this month, the company reported that traffic rose 12% as load factor—the percentage of available seats filled—grew to 78.3% from 75.9% and capacity jumped 8.3%."

(Ben Mutzabaugh - USA Today)

No comments: