Southwest Reports Higher $161 Million Second Quarter Net Income

Southwest Reports Higher $161 Million Second Quarter Net Income

Southwest Airlines reported second quarter 2011 net income of $161 million compared to net income of $112 million in the same quarter last year. Revenue rose 31 percent to $4.1 billion, reflecting the acquisition of AirTran Airways. Analysts had estimated the airline would take in $4.4 billion.

Operating income was $207 million for second quarter 2011, compared to $363 million for second quarter 2010. Even with the improved results, Southwest said it had no plans to increase capacity in 2012.

“With energy prices surging, and Brent crude oil near $120 a barrel, significant revenue growth was critical to achieve second quarter 2011 operating income of $276 million and net income of $121 million,” said Gary Kelly, Southwest’s chairman, president and CEO of Southwest. “Record load factors and record passenger yields resulted in a record $3.9 billion in passenger revenues. Still, with our economic fuel costs rising 72 percent, our year-over-year revenue growth could not keep pace.”

Kelly said Southwest is holding off on expansion plans for next year. “Given the pessimistic near-term outlook for fuel prices and the U.S. economy, we have re-evaluated our capacity plans [and] we have reduced our planned 2012 capacity to be equal to or less than our 2011 combined available seat miles,” he said. During the quarter, Southwest completed its acquisition of AirTran, which became a wholly owned subsidiary on May 2.