Southwest Airlines on
Thursday reported a $112 million second-quarter profit. As the last of the major domestic carriers to
report earnings, Southwest's net income helped propel the nine largest U.S.
carriers to an aggregate quarterly profit of $1.86 billion, rivaling the best
earnings of the decade.
According to a research note
issued Thursday by AirlineFinancials.com, the nine largest U.S. carriers
reported $31.7 billion in revenues for the quarter, the second best in history
after the $33.3 billion record set in the second quarter of 2008. The $1.86
billion in net profits, meanwhile, "missed the decade high set in 2007 by
only $8 million."
Southwest CEO Gary Kelly
during the carrier's earnings call on Thursday said the carrier's revenue during
the quarter grew 21 percent. "It's a revenue story," he said.
"That's what drove our earnings growth, and a number of factors are
involved in driving our revenue growth. All of that led to our second-best
quarterly profit in our history, second only to the second quarter of
2006."
CFO Laura Wright said
business travel demand strengthened during the quarter, but added that sector
"has not fully recovered." The carrier said it determines business
performance from a number of metrics, including close-in booking windows,
Business Select uptake and corporate account performance, among others.
Revenue from the carrier's
Business Select product grew 24 percent year over year, while corporate account
revenue—which Kelly said comprises less than 10 percent of Southwest's overall
business—grew 30 percent year over year in terms of passengers and more than 50
percent year over year in terms of revenues. Kelly said corporate business is
"a minority of our business, and not even the majority of our business travelers,
but it's at least some indication that we're seeing some strengthening
there."
Kelly said the carrier will
be making a further push to drive more business travel "over the next 12
months," as it rolls out onboard Wi-Fi, upgrades its frequent flyer
program and strengthens the value proposition for that category of passenger.