Southwest Airlines said its net income more than doubled to $152 million in the first quarter even though it canceled more than 7,500 flights because of winter storms.
The Dallas-based carrier said revenue grew 2 percent to $4.16 billion as passengers paid slightly higher fares on fuller flights. However, severe winter storms cost the carrier about $50 million.
“Demand was very strong and very steady and resilient, you might say, considering the extreme weather and all the flight cancellations, and we’re very grateful to our customers for hanging in there with us as well,” Southwest Chief Executive Gary Kelly said on a conference call with investors Thursday.
Bookings in the second quarter are strong, Kelly said, and stable fuel prices are helping produce record profits. Southwest paid an average of $3.08 per gallon of jet fuel in the first quarter, compared with $3.29 in the same period in 2013.
Southwest is almost finished with its integration of AirTran Airways, which it bought in 2011. The carrier expects to convert all of AirTran’s remaining airplanes and markets to Southwest, allowing it to retire the AirTran brand by the end of the year.
Southwest ended the quarter with $3.5 billion in cash and short-term investments and said it spent $407 million on capital expenditures, including buying 27 pairs of takeoff and landing slots at Washington’s Reagan National Airport from American Airlines.
Excluding one-time accounting items, Southwest said its profits were $126 million, or 18 cents a share, beating Wall Street estimates of 16 cents.
Shares of Southwest (ticker: LUV) rose 19 cents to $24.27 on Thursday.
“The outlook remains quite strong and management continues to see improving load factors as the company slows capacity growth,” Cowen & Co. analyst Helane Becker wrote in an investor note Thursday.
Southwest said it expects to keep capacity flat in 2014 even as it adds new routes to New York LaGuardia, Reagan and Dallas Love Field. Although the carrier hasn’t finalized plans for 2015, it said it is looking at more international flights with the opening of its new international terminal at Houston Hobby Airport.
“We have a desire to grow modestly next year based on the results we expect for 2014,” Kelly said.