Despite losses on its fuel hedging portfolio, Southwest Airlines posted a $228 million profit for the second quarter.The Dallas-based carrier said net income increased 42 percent over the second quarter of 2011. Revenues grew 11.6 percent to $4.6 billion."The sluggish economy was no help. High fuel prices were no help although they were at least lower than the first quarter," said chief executive Gary Kelly on a conference call with analysts and investors. "While we remain cautious about the domestic economy. Our business seems to be holding up well."Part of the revenue growth came from increasing fares as Southwest's average fare rose to $150, up 5 percent compared to the second quarter last year. Passenger traffic during the quarter grew 5.1 percent as capacity also increased 5.6 percent.Southwest said its unit revenues - a measure that tracks how much money an airline collects for every seat-mile flown - grew 6.0 percent in the quarter.The carrier's second quarter results included a net $38 million accounting charge related to its fuel hedging contracts and $7 million in expenses related to its integration of AirTran Airways, which it purchased in May 2011. Excluding these one-time accounting items, Southwest said its net income was $273 million, or 36 cents per share, beating Wall Street analysts estimates of 33 cents per share.The carrier ended the quarter with a cash and short-term investments balance of $3.3 billion and said it has completed about half of the repurchase of $1 billion in company stock.In the second quarter, Southwest announced it was deferring delivery of Boeing aircraft and transferring its fleet of Boeing 717s to Delta Air Lines."Given that we don't plan to grow the fleet until we hit our financial targets, deferring 30 new aircraft deliveries will reduce our 2012 to 2014 capital spending by approximately $1 billion," Kelly said.Chief financial officer Laura Wright said the Wright Amendment revenues for the quarter topped $74 million, up from $63 million in the same period last year. Earlier this month, Delta announced it would start flying nonstop service to Atlanta from Dallas Love Field using regional 50-seat jets."We always take competition seriously but I think we would be delighted to compete head-to-head against regional jets every day," Kelly said. "In the grand scheme of things our big competition out of Dallas is coming from DFW Airport and not Love Field."