Southwest Airlines reports a record third quarter net profit

Southwest Airlines Company (Dallas) today reported its third quarter 2015 results:

Record third quarter net income, excluding special items, of $623 million, or $.94 per diluted share. This represented a $241 million increase from third quarter 2014 and exceeded the Thomson Reuters First Call mean estimate of $.92 per diluted share.

Record third quarter GAAP net income of $584 million, or $.88 per diluted share, compared with third quarter 2014 GAAP net income of $329 million.

Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated, “We are very pleased to report outstanding third quarter 2015 results marked by a 63.1 percent year-over-year increase in net income, excluding special items. Our record third quarter operating income, excluding special items, of $1.0 billion produced a strong 20.3 percent operating margin, which is a 680 basis point improvement from the year-ago period. The significant margin expansion was driven largely by lower fuel prices. Our results also benefited from a continued focus on cost control and solid overall revenue performance, including a significant contribution from our Rapid Rewards program. Customer demand for our low fares was evident with an all-time quarterly record load factor of 85.4 percent for third quarter 2015. That’s what low fares without ‘gotcha’s’, which we call TransfarencySM, will do for you. My thanks to our superb Employees for producing our tenth consecutive quarter of record profits and my congratulations to them on their record $484 million profitsharing accrual, thus far this year.

Fleet and Capacity

During third quarter 2015, the Company received three pre-owned Boeing 737-700s to end the quarter with 692 aircraft. The Company continues to manage to approximately 700 aircraft at year-end 2015 and continues to expect to grow its fleet approximately two percent, year-over-year, in 2016. Additional information regarding the Company’s aircraft delivery schedule is included in the accompanying tables. The Company’s capacity plans remain unchanged with expected available seat mile growth of approximately seven percent this year, and an estimated five to six percent in 2016, both year-over-year.