Southwest Airlines reported strong corporate travel demand
in the second quarter, but yields were down as the carrier sees more
discounting closer in to flights.
Passenger revenue increased 1.1 percent year over year to
$4.9 billion, and total operating revenues increased 5.3 percent to $5.4
billion, a quarterly record. Southwest's traffic increased 6 percent during the
quarter, and capacity increased 4.8 percent; the carrier's load factor
increased a percentage point to 85.6 percent.
Yield, however, declined 4.6 percent, and average passenger
fare declined 3.7 percent to $151.67 during the quarter.
"Traffic and booking trends remain strong, but the fare
environment continues to be a challenge," Southwest chief financial
officer and executive vice president Tammy Romo said in the carrier's earnings
call. "We're seeing heavy discounting of fares close-in, which has
softened in recent weeks."
Southwest reported a net income of $820 million for the
quarter, up from $608 million in the second quarter of 2015.