Southwest Airlines and AirTran Airways Q3 Profit Takes Off

Southwest Airlines posted a third-quarter profit of $205 million, or 27 cents per share,
Thursday morning — a significant jump from a net loss of $16 million a year ago.
AirTran Airways more than tripled its profit in the third
quarter on higher revenue and passenger traffic.


Airtran

Southwest said higher sales boosted the company’s third-quarter
returns. Total revenue hit $3.1 billion, up 20 percent from $2.6 billion a year
earlier.

AirTran’s net income increased 249 percent
to $36.3 million, or earnings of 22 cents a share, as revenue rose 11.8 percent
to $667.9 million. The gain included a $15.3 million non-operating gain on
derivative financial instruments.

AirTran also reported all-time record for
traffic (5.2 billion revenue passenger miles) and its second highest load
factor in company history (84.1 percent).

Southwest’s profit outperformed analyst projections, with
Thomson’s First Call predicting returns of 25 cents per share for the quarter.
The company’s stock jumped almost 3 percent Thursday morning, hitting $13.51
per share, up from the previous day’s close of $13.16.

“Our outlook for October is excellent, based on traffic and revenue trends, thus
far,” Southwest CEO said in a
statement. “We are encouraged by the sustained momentum, especially in what is
typically a seasonally weaker travel period.”

Southwest said its pending acquisition of AirTran has
the potential to add 2 million passengers to the company’s consumer base, while
generating $200 million in customer savings, according to a research report by Campbell-Hill Aviation Group. The acquisition will grow
Southwest’s fleet by 25 percent.