Southwest Airlines saw its fourth-quarter profit cut in half as fuel, labor and operating costs grew.
The Dallas-based carrier reported a $78 million profit for the final three months of the year, compared with a $152 million profit a year earlier.Higher fares helped offset growing costs as the average ticket price increased 5.4 percent to $148.02. Revenue rose slightly to $4.2 billion even as Southwest trimmed capacity and reported more empty seats.Chief Executive Gary Kelly said Southwest plans to make its aircraft more efficient this year and increase flights between 8 a.m. and 7 p.m. as it continues to replace older planes with larger Boeing 737-800s."We've trimmed out frequencies, and we'll continue to do some of that in 2013," Kelly said. "We hope what we have less of is eliminating city pairs in this environment."For the full year, Southwest reported a profit of $421 million, its 40th consecutive profitable year. Revenue increased 9 percent to $17.1 billion, offsetting a 10 percent rise in operating costs.The carrier retrofitted 259 Boeing 737-700s in 2012 with a new interior that also added six seats to each plane. Southwest expects to have all 372 of its 737-700s redone by June and 78 of its older Boeing 737-300s retrofitted by the end of the year.Excluding one-time accounting items, Southwest said its fourth-quarter net income was $65 million, or 9 cents a share, which beat Wall Street analysts' estimate of 8 cents, according to First Call.Shares of Southwest (ticker: LUV) rose 9 cents to $11.45 on Thursday.The carrier paid $3.32 per gallon for fuel in the fourth quarter, compared with $3.29 in the same period in 2011.Southwest said it expects fuel to cost $3.30 per gallon in the first quarter.This week, Southwest introduced a new fee, charging $40 to customers who want to board in the "A" Group. But Kelly said the airline isn't ready to drop its "bags-fly-free" campaign."Customers hate bag fees," Kelly said. "There would be an impact to the brand."Andrea Ahles, 817-390-7631Twitter: @Sky_Talk
United loses $620 million
United Continental Holdings posted a $620 million loss for the fourth quarter, compared with a $138 million loss in the same period in 2011, as its passenger traffic declined by 3.2 percent. Revenue in the quarter declined 2.5 percent to $8.7 billion.
For 2012, United reported a $723 million loss, compared with a $840 million profit in 2011. Revenue grew 0.1 percent to $37.15 billion. -- Andrea Ahles
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