Southwest Airlines posts profit for 40th straight year

Southwest Airlines 737-8H4 (36992/4126) N8317M captured arriving at Los Angeles International Airport (LAX/KLAX) on January 18, 2013.

(Photo by Michael Carter) 

Southwest Airlines posted 2012 net income of $421 million, marking its 40^th consecutive year of profitability.

The net profit more than doubled net income of $178 million in 2011. The profit increase was achieved even though Southwest’s fourth-quarter net income declined 48.7% year-over-year to $78 million. Chairman, president and CEO Gary Kelly noted that finishing in the black for 40 years consecutively is “a record unmatched in the airline industry.”

He added in a statement, “As we enter 2013, bookings and revenue trends, thus far, suggest a year-over-year improvement in January 2013 passenger unit revenues in the 2%-3% range. While the effect of US tax increases on the domestic economy remains uncertain, bookings for the remainder of first quarter, thus far, are strong.”

The Dallas-based low-cost carrier’s 2012 revenue rose 9.1% year-over-year to $17.09 billion while expenses increased 10% to $16.47 billion. Operating income fell 10.1% to $623 million. Net income was helped by $4 million in net favorable special items, which compared to $152 million in net unfavorable special items in 2011.

Kelly said “significant optimization efforts are planned in 2013 for the AirTran network,” which should boost revenue performance. Southwest and AirTran received a single operating certificate in 2012.

Southwest’s full-year traffic rose 5.4% year-over-year to 102.87 billion RPMs on a 6.3% increase in capacity to 128.14 billion ASMs, producing a load factor of 80.3%, down 0.6 point. Passenger yield lifted 3.4% to 15.64 cents.

(Aaron Karp - ATWOnline News)