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Southwest posts $152M 4Q profit on strong traffic
DAVID KOENIG
(The Associated Press)



04:30:02PM (ET) Friday,January 20,2012.

DALLAS (AP) — Even with a tough economy and high jet fuel prices, Southwest Airlines Co. made money in the fourth quarter and could do better this year.

Travel demand was strong enough in the final three months of 2011 for the carrier to keep planes nearly full and raise fares.

The carrier's fourth-quarter net income rose 16 percent to $152 million, and profit was slightly higher than analysts expected. Revenue jumped to $4.11 billion.

CEO Gary C. Kelly said he expects strong revenue in the first quarter too, based on passenger-booking trends.

People travel more when the economy is strong, and there are signs that growth is recovering from the 2007-2009 recession.

Auto sales picked up late last year. U.S. factory output rose sharply in December. And the stock market is up — the Dow Jones industrial average has gained 3 percent so far in 2012.

"2012 is going to be better for Southwest. It's going to be a good year for the airline industry," said Ray Neidl, an analyst with Maxim Group LLC. "The airlines can double their profitability" over 2011.

Neidl said that's possible — even with just modest economic growth — because airlines are limiting flights, which keeps planes full and lets them raise fares.

In the fourth quarter, Southwest filled more than 80 percent of its seats, an unusually high percentage. And the average passenger paid a fare of $140.18, up 10 percent from a year earlier when including price increases at its AirTran Airways subsidiary.

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With the promos,profits are up.

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