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Southwest Reports Modest First Quarter Profit

April 21, 2011 By: George Dooley Travel Agent

Southwest Airlines saw a modest profit for the first quarter of 2011, albeit a decline from last year’s first quarter results. The airline reported a 2011 first quarter net income of $5 million, a decrease compared to the airline’s net income of $11 million for the first quarter of 2010. Both in 2010 and 2011, the company’s first quarter results included special items related to non-cash, mark-to-market and other items associated with a portion of the company's fuel hedge portfolio, Southwest said.

In addition, Southwest’s first quarter 2011 results included approximately $9 million in charges, net of profit sharing and taxes, primarily related to consulting fees in association with the Southwest’s acquisition of AirTran Holdings, Inc. Excluding special items in both periods, Southwest’s first quarter 2011 net income was $20 million, compared to $24 million for first quarter of 2010.

Operating income was $114 million for the first quarter of 2011, compared to $54 million for first quarter 2010. Excluding special items in both periods, operating income was $110 million for first quarter 2011, compared to $102 million for first quarter 2010.

Gary C. Kelly, Southwest Airlines chairman and CEO cited “escalating jet fuel prices and inclement weather” as major challenges to Southwest’s first quarter profitability for 2011.

The first quarter of 2011 also saw a major overhaul of the airline’s frequent-flyer program, Rapid Rewards; new service to Charleston and Greenville-Spartanburg, SC; the acquisition of slots and terminal facilities in Newark, NJ; the addition of Boeing 737-800 aircraft slated for 2012; and the acquisition of AirTran Airways, which the airline hopes to close on May 2.


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By George Dooley | April 21, 2011
Southwest expects to close its acquisition of AirTran on May 2nd.
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