Southwest Airlines has posted operating income of $70 million in its first quarter, more than three times the $22 million operating profit it recorded in the same period in 2012.
Operating revenues were up 2.3% to $4.08 billion, while operating expenses rose 1.1% to $4.01 billion. The airline's net income fell 39.8% to $59 million.
"The significant year-over-year improvement in our first quarter results (excluding special items) was driven by record first quarter revenues and a better-than-expected cost performance," says Gary Kelly, Southwest's president and chief executive.
Passenger traffic rose 0.3% during the quarter and capacity was up 0.6%. The passenger load factor declined 0.2 percentage points to 77.1%. Passenger revenue per available seat mile rose 1.8% to 12.46 cents, says Southwest.
Passenger unit revenue trends were "relatively stable" through February, says Kelly, adding that March's unit revenues outperformed the domestic industry despite being worse than expected.
Southwest expects a year-on-year decline in April passenger unit revenues, adds Kelly. "While we are cautious about April trends and the potential effects from government sequestration, recent bookings for May and June have been solid, and lower fuel prices have roughly offset the revenue weakness thus far in April."