Southwest Airlines Reports Record Profits

Southwest Airlines reports its fourth quarter and full year 2013 results including record fourth quarter net income, excluding special items, of $236 million. This compares to fourth quarter 2012 net income, excluding special items, of $65 million.

Southwest also reported record full year net income, excluding special items, of $805 million compared to full year 2012 net income, excluding special items, of $417 million.

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Gary C. Kelly, chairman, president, and CEO said: "We are happy to report full year 2013 net income of $805 million, and fourth quarter 2013 net income of $236 million, both excluding special items.  We are extremely proud of these record results and the tremendous progress made on our strategic initiatives, which produced substantial returns and contributed significantly to our superb 2013 financial performance."

"Our full year 2013 total operating revenues were a record $17.7 billion, and our cost performance was excellent, " Kelly said.  "We generated strong free cash flow of $1.0 billion in 2013, allowing us to return $611 million to our shareholders, through share repurchases and dividend payments, and reduce debt and capital lease obligations by $313 million.  Our pre-tax return on invested capital, excluding special items (ROIC), for full year 2013 was 13.1 percent, nearly double the prior year's performance. "

"We ended 2013 strong, with an exceptional fourth quarter performance.  Total operating revenues  were a fourth quarter record $4.4 billion, increasing 6.1 percent compared to fourth quarter last year.  While traffic was impacted at the beginning of the quarter by the federal government shutdown, we saw a healthy rebound in traffic and revenue trends, resulting in a five percent year-over-year increase in passenger unit revenues for the combined November/December period," Kelly said.

"Strong travel demand and favorable year-over-year unit revenues have continued in January, thus far.  And, bookings for the remainder of the first quarter are strong.  Based on these trends, we currently expect year-over-year growth in first quarter 2014 unit revenues," Kelly said. 

Kelly said Southwest was on track with its AirTran integration, achieving approximately $400 million in annual net pre-tax synergies in 2013, as planned.  The airline is also on track to convert AirTran's seven international markets, along with its remaining domestic markets, by the end of this year.  As planned, this will allow Southwest to complete the AirTran integration and retire the brand by the end of 2014, the airline said. 

Southwest said it  plans to launch international service this year and reports it will  bring more flights to New York's LaGuardia Airport.

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