Southwest Airlines said Thursday that its second-quarter profit rose 34% from the year-ago period, as increased demand and disciplined seat-capacity management helped to drive ticket prices higher.
"Although business demand has not fully recovered, it has strengthened, and consumer travel demand is robust," said Chairman and Chief Executive Gary Kelly. "We experienced record traffic levels during the quarter, despite flat year-over-year capacity, demonstrating a continuing and significant market-share shift to Southwest."
For the recent period, the Dallas-based carrier said it earned $112 million, or 15 cents a share, up from $91 million, or 12 cents a share, in the year-earlier period. Excluding items, earnings in the latest quarter would have been 29 cents a share. On average, analysts polled by FactSet Research were looking for a profit of 26 cents a share.
Total operating revenue rose to $3.17 billion from $2.62 billion, versus analysts' mean estimate of $3.15 billion.
In the past year, Southwest stock has risen 56.6% as investors shook off the financial crisis from late 2008.
Revenue per available seat mile, or unit revenue, outpaced unit costs during the quarter as average ticket prices climbed rapidly. Unit costs rose 12.8%, or 6.4% after excluding fuel, while unit passenger revenue jumped 21.5%.
Average passenger fare rose 19.3% to $131.82.
Looking ahead, Southwest said it would continue to restrain capacity to grow its revenue and profits.
"Given the current economic outlook and trends, we continue to approach route expansion through optimizing our flight schedule rather than fleet growth," said Kelly, in a statement. "We remain committed to reaching our financial targets before we return to any significant level of fleet growth."
