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UPDATE 2-Southwest Airlines quarterly profit tops estimates
April 25, 2013 / 11:26 AM / 5 years ago

UPDATE 2-Southwest Airlines quarterly profit tops estimates

* First quarter profit excluding items tops analyst average estimate

* Lower fuel prices seen offsetting April revenue softness

April 25 (Reuters) - Southwest Airlines Co reported a higher-than-expected quarterly profit on Thursday as higher fares boosted passenger revenue.

The traditional discount carrier cautioned that a key revenue measure, unit revenue, would weaken in April but said May and June bookings were looking stronger. It added that lower fuel prices were expected to offset the April softness.

Other airlines have noted weaker near-term revenue trends. Delta Air Lines said this week that U.S. government spending cuts and lighter demand from leisure travelers would hurt unit revenue in April, while US Airways Group said demand from business passengers had been pressured since the start of the government cuts, known as sequestration.

Not only are government agencies spending less, but the Federal Aviation Administration began furloughs of air traffic controllers this week, resulting in flight delays at some U.S. airports. The trade group for U.S. airlines has filed suit seeking a halt to the furloughs.

Southwest Chief Executive Gary Kelly told the CNBC network on Thursday that he hoped the air traffic control furloughs would end soon.

“It will damage the economy if we hurt air travel. So far, I don’t think air travel has been hurt,” said Kelly, who added that Southwest’s May and June bookings “look quite good.”

Net income at Southwest came to $59 million, or 8 cents a share, for the first quarter, compared with $98 million, or 13 cents a share, a year earlier.

Excluding items, profit was 7 cents a share compared with 2 cents a share expected by analysts, according to Thomson Reuters I/B/E/S.

Quarterly revenue rose 2 percent to $4.1 billion. Operating expenses rose 1 percent.

The number of passengers boarding Southwest planes fell 1 percent in the quarter but the average fare rose nearly 4 percent to $152.29.

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