Southwest Profits As Fares Rise Faster Than Fuel
Rising fares are helping Southwest Airlines more than offset the high cost of jet fuel.The airline said Thursday that second-quarter profit soared 42% on record revenue.
The average one-way fare topped $150, up 5% from last summer. Plenty of passengers were willing to pay the higher prices as the peak vacation season began — traffic measured in miles traveled also rose 5%.
Southwest added flights compared with last year, which resulted in a few more empty seats. The average flight was 81.9% full, compared with 82.3% in early summer 2011.
Southwest has scaled back more-ambitious growth plans until the economy and Southwest’s profit margins improve. Earlier this year, the company decided to delay delivery of 30 new Boeing 737s due in 2013 and 2014 by four years. It also will lease smaller planes used by AirTran to Delta Air Lines Inc. starting next year.
“For now, our goal is to keep our fleet relatively flat,” CEO Gary Kelly said Thursday.
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