Southwest Airlines posted double-digit gains freight revenue and overall profits in the second quarter, despite growing fuel prices.
The Dallas-based carrier reported $33 million in revenue from freight in the second quarter, a 17.9 percent increase over the same period last year. The increase followed a strong 36 percent jump for first quarter to bring its tally for the first half of the year to $67 million in revenue, a 24.1 percent year-over-year increase.
Southwest also registered a 41 percent rise in profit over the same period last year and a 13.3 percent revenue increase. The carrier said modest increases in fares and demand helped push up its results and offset a 25 percent increase in jet fuel costs. The carrier also benefited from the fuel hedging it was able to do before the current spike in prices.
"Although we remain well-hedged, our employees understand that we must be prepared for higher fuel costs, and they are working harder than ever to reduce our cost structure through increased productivity," said Southwest CEO Gary C. Kelly. "Based on current cost trends, we expect third quarter 2005 unit costs, excluding fuel, to be in line with second quarter 2005 unit cost of 6.27 cents. Current jet fuel costs are higher than (the) second quarter."
For the first quarter, the carrier chalked up about 75 percent of the growth to an increase in mail revenues gained after the U.S. Postal Service shifted more business to commercial carriers, including Southwest.
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