UPDATE 2-Southwest Airlines Q4 profit tops estimates as costs fall
* Q4 adjusted profit 33 cents vs estimate 29 cents
* Operating expenses fall 1 percent
* Shares rise 1 percent
Jan 23 (Reuters) - U.S. carrier Southwest Airlines Co posted a better-than-expected profit in the fourth quarter, aided by higher fares and lower costs for fuel and aircraft maintenance.
The carrier cited strong demand and forecast that unit revenue, or passenger revenue per available seat mile, would rise in the current quarter.
Net income rose to $212 million, or 30 cents a share, in the fourth quarter, from $78 million, or 11 cents a share, a year earlier.
Excluding special items, the profit was 33 cents a share. That compared with 29 cents expected by analysts, according to Thomson Reuters I/B/E/S.
Quarterly revenue increased 6 percent to $4.43 billion, compared with $4.39 billion estimated by analysts. The average airfare rose 5 percent to $156.05.
Operating expenses fell 1 percent, with fuel and oil costs down 9 percent. Expenses for maintenance materials and repairs dropped about 12 percent.
Dallas-based Southwest added seats to planes, raised baggage fees at its AirTran unit and curbed flying to unprofitable markets to improve results as it faced rising labor costs. Southwest is still retiring older Boeing 737 planes to help reduce maintenance costs.
Southwest is the only major U.S. airline that has not restructured in bankruptcy, and its cost advantage against rivals has narrowed.
Southwest plans to start international service under its own brand this year, and said on Thursday it expects to complete the absorption of AirTran this year and retire the brand.
Southwest also said it bid on takeoff and landing rights that the newly merged American Airlines Group was required to divest at Reagan National Airport near Washington. Late last year Southwest bought slots at New York's LaGuardia Airport that American agreed to shed to settle a U.S. Justice Department lawsuit over its merger with US Airways.
Southwest shares rose 1 percent to $21.98 in morning trading. Shares of other airlines were down, along with the broader market. Delta Air Lines Inc was off 0.9 percent at $32.56, and United Continental dropped 3 percent at $47.70.
United Continental on Thursday reported a quarterly profit that easily topped expectations, helped by an increase in passenger travel, higher ticket prices and lower fuel costs.