Southwest Airlines profit jumps 40 percent

Tuesday, Oct. 20, 1998 | 11:53 a.m.

Southwest Airlines today reported a 40.1 percent increase in third-quarter earnings thanks to higher passenger levels and lower fuel costs.

The company that carries the most passengers to Las Vegas' McCarran International Airport said net income increased to $129.6 million from $92.5 million a year earlier, based on revenues of $1.094 billion, a 9.8 percent increase from $997.2 million in the third quarter of 1997.

Earnings per share increased from 27 cents to 37 cents.

Las Vegas passenger traffic for Southwest paralleled the company's earnings track. Southwest's passenger counts were up 3.2 percent from September 1997 to September 1998 and year-to-date statistics are up 1.1 percent. McCarran's total passenger counts were down 1.4 percent for September and 1.5 percent for the year to date.

Southwest Chairman Herbert Kelleher said the Dallas-based airline increased revenues with passenger loads of 68.9 percent for the quarter, a 3.1 percent increase over the 1997 third quarter. Loads represent the percentage of seats carrying paying customers.

Kelleher also said expenses overall were down with fuel costs lower by 24.4 percent. With the exception of fuel, expenses were up about 2.4 percent.

The company forecasts a bright fourth quarter with loads up early in the period, strong advanced bookings and fuel costs still running below last year's levels.

In July, Southwest's board of directors approved a three-for-two split of the company's common stock and increased its regular quarterly dividend 11.9 percent to 75 cents per share.