Southwest Airlines Co. is making money as more people travel on the nation’s largest discount airline.Southwest said Thursday it earned $205 million in the July-through-September quarter.
Traffic was up about 5 percent, which along with higher average fares pushed revenue up 20 percent.
CEO Gary Kelly said the outlook for October is excellent too. He predicted revenue per passenger will rise in the fourth quarter even though that’s usually a slow period for travel, other than the December holidays.
Dallas-based Southwest joined United, Continental, Delta, American, US Airways and JetBlue in posting third-quarter profits as the airlines benefited from higher fares and growing travel demand coming out of the recession. Combined, the leading U.S. airlines earned more than $2 billion in the quarter.
The airlines have helped themselves by limiting available seats, which makes flights more crowded and drives up fares. Southwest has set monthly records for high occupancy in 14 of the last 15 months.
After shrinking last year, Southwest has been adding flights in recent months, and it laid out plans Thursday to grow aggressively early next year. It figures to operate about 8 percent more flights in the first quarter of 2011 than it did in the same period this year.
Kelly said travel demand is growing fast enough to fill up the extra seats.
“We see very strong demand for the next 60 to 90 days, which we think will carry through to the first quarter of next year,” Kelly said. He added that many of the new flights announced by other U.S. airlines are on international routes that Southwest doesn’t serve.
Revenue rose to $3.19 billion from $2.67 billion a year ago, slightly higher than the $3.17 billion that analysts expected.