Southwest Airlines Reports $16 Million Quarterly Loss

Southwest Airlines reports a net loss for the third quarter of $16 million, substantially less than the net loss of $120 million it reported for the third quarter of 2008. Excluding one-time items, the company said it earned $23 million, or 3 cents a share, in the period.

Third-quarter 2009 results included special items (net of profit sharing and taxes) consisting of a charge of $27 million relating to the company’s early-out program and a net loss of $12 million relating to non-cash, mark-to-market and other items associated with a portion of the company’s fuel hedge portfolio.

Operating revenue fell nearly 8 percent to $2.7 billion from $2.9 billion. Gary C. Kelly, chairman of the board, president, and CEO, praised the airline’s employees, saying that 60 days ago, even a modest profit seemed “unattainable.”

Total third- quarter 2009 operating expenses were $2.6 billion, compared to $2.8 billion in the third quarter of 2008. Operating income for the third quarter of 2009 was $22 million, compared to $86 million in the third quarter of 2008, a decline of 74 percent.

Excluding special items, operating income was $129 million in the third quarter of 2009, compared to $147 million last year, a drop of 12 percent. The company’s third-quarter 2009 total operating expenses decreased 5.7 percent from third-quarter 2008 largely due to lower energy prices, and were down 7.5 percent, excluding special items.

Even with approximately $78 million in unfavorable cash settlements from derivative contracts in third-quarter 2009, economic fuel costs decreased 17.4 percent to $2.13 per gallon, including taxes.