Southwest Airlines Reports 23% Profit Jump, Announces Order for 25 New Boeings
Southwest Airlines on Thursday reported a second quarter 2010 net income of $112 million, or $.15 per share, compared to net income of $91 million, or $.12 per share, for the second quarter 2009.
The second quarter 2010 net income, excluding special items, of $.29 per diluted share exceeded Thomson’s First Call mean estimate of $.27 per diluted share, the company said.
Total operating revenue for the second quarter increased 21.1% to $3.17 billion from $2.62 billion for second quarter of 2009. Eleven analysts estimated revenues of $3.15 billion for the quarter.
“Given the current economic outlook and trends, we continue to approach route expansion through optimizing our flight schedule rather than fleet growth,” said said Gary Kelly, chairman of the board, president, and chief executive officer of Southwest Airlines. “For 2010, our capacity will remain essentially flat with last year. For 2011, we are estimating a modest year-over-year capacity increase with no fleet growth.”
“We remain committed to reaching our financial targets before we return to any significant level of fleet growth,” Kelly added.
Southwest said it has updated its schedule to replace its 737 Classic fleet to improve its operational and economic efficiency and, accordingly, also updated its future firm orders and options with Boeing with no net change to its fleet plans.
The Boeing schedule revisions included conversion of six purchase rights to 2014 options, acceleration of three options (two from 2015 to 2013; one from 2016 to 2014), and exercise of 25 737-700 options for firm delivery in 2011 through 2016. In addition, the Company now has 98 purchase rights through 2021.