Southwest posts record 3Q profits

Washington DC
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Southwest Airlines has reversed a $16 million loss recorded in the third quarter of 2009 to a $195 million profit, which the carrier says is a record for the company.

The $195 million profit excludes special items. Factoring in those items Southwest posted third quarter profits of $205 million.

Southwest recorded a 20% increase in revenues year-over-year to $3.2 billion as yields improved 14%.

Consolidated expenses at Southwest increased 7% to $2.8 billion as fuel costs increased 12% to $926 million.

Southwest also posted a healthy rise in its operating profits for the third quarter from $22 million to $355 million.

Carrier chief executive Gary Kelly says October's outlook is excellent, based on current traffic and revenue trends in what it typically a weaker travel period.

Southwest on 27 September unveiled plans to purchase low cost carrier AirTran Airways, which would result in immediate 25% growth for Southwest. The carriers are working to gain regulatory approval for the transaction.

Southwest ended the third quarter with a cash balance of $3.7 billion.