Southwest Airlines has reported profits (excluding special items) of $417 million - growth of 26 percent as compared to 2011 - and representing the airlines 40th consecutive year of profitability, according to Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer.
"Without a doubt, this is a remarkable feat and a record unmatched in the airline industry," Kelly said. "These solid earnings were achieved despite significant efforts and costs related to critical strategic initiatives. I expect these initiatives to produce substantial returns over the next several years."
Southwest's fourth quarter and full year 2012 results, included fourth quarter 2012 net income was $78 million. This compared to net income of $152 million in fourth quarter 2011. Excluding special items, fourth quarter 2012 net income was $65 million.
For the full year 2012, net income was $421 million, Southwest said. This compared to $178 million in 2011. Excluding special items, full year 2012 net income was $417 million compared to net income of $330 million for 2011. Operating income for full year 2012 was $623 million, compared to $693 million for full year 2011. Excluding special items, operating income for full year 2012 was $838 million, which was comparable to full year 2011.
"Our fourth quarter 2012 operating revenues were a fourth quarter record $4.2 billion, bringing full year 2012 operating revenues to more than $17 billion. Our strong fourth quarter 2012 operating revenue performance was driven by record yields, continued high load factors, and an impressive freight revenue performance," Kelly said.
Southwest's profits were achieved despite the transitional state of the acquired AirTran route network, Kelly said. "As we enter 2013, bookings and revenue trends, thus far, suggest a year-over-year improvement in January 2013 passenger unit revenues in the two to three percent range. While the effect of U.S. tax increases on the domestic economy remains uncertain, bookings for the remainder of first quarter, thus far, are strong." Kelly said.
Kelly said Southwest is on track to fully integrate AirTran into Southwest Airlines by the end of 2014. "Our financial position remains strong with $3 billion in cash and short term investments. We generated $716 million in free cash flow during 2012, and we expect healthy free cash flow in 2013. We remain focused on enhancing Shareholder value through capital efficiency and our targeted 15 percent pretax return on invested capital," Kelly said. Visit www.southwest.com