Southwest Airlines, the third-largest carrier at Denver International Airport, on Thursday reported a $23 million third-quarter net profit.
The amount excludes “special items” such as a $27 million employee buyout program and the shrinking value of its fuel hedge portfolio at $12 million.
The performance is down from the $69 million profit that the Dallas-based airline submitted in the same period last year but was better than had been forecast, said Southwest chief executive Gary Kelly.
“But like a lot of hard-fought gains, that number doesn’t tell the story,” Kelly said in a conference call with analysts. “But regardless, a profit is a profit, and in this terrible environment, we’ll certainly take it.”
Kelly and chief financial officer Laura Wright credited cost control and revenue enhancements such as $10 million in new fees for pet transport, unaccompanied minors and heavy and excess bags.
By cutting “unprofitable and unpopular” flights, Kelly said, Southwest increased its bottom line by about $100 million.
Southwest recently announced its March schedule, which Kelly said is like the January schedule with seasonal adjustments. Added will be 62 round-trip flights and eliminated will be 10 roundtrip flights, none of which directly impact Denver.
Kelly said he does not think “the worst is behind us if for no other reason because of higher energy costs.” He also doesn’t think business travel will return soon. When pressed about ancillary fees, he said, “We have no plans to charge for the first or second bags.”
Ann Schrader: 303-954-1967 or aschrader@denverpost.com
