Southwest Airlines eked out a small third-quarter profit in spite of a September slowdown, the company said on Thursday.
The airline has been using a mix of fare increases and sales to try to get its prices to a level that travellers will pay. Last month, fares paid by business travellers were soft, CEO Gary Kelly said on CNBC.
"Business travellers were there, but it felt like we needed a little bit more aggressive pricing to entice them," he said.
It's possible the slowdown is over. Kelly said a key measure of revenue is 4 per cent higher this month than in October 2011.
While Southwest rolls out the occasional sale to fill planes — they were 82.1 per cent full, a record for the quarter — it has also been aggressive about trying to raise fares in recent months.
It launched two of the three fare increases that stuck during the quarter, according to a tally by Rick Seaney, CEO of air-travel website FareCompare.com.
And when an attempted increase by United Airlines last week faltered, Southwest that came along and revived it. Seaney wrote at the time that in almost a decade of watching fares, he had never seen a low-cost airline revive a failed domestic price hike.
Southwest earned $16 million for the quarter that ended Sept. 30, or 2 cents per share. Not counting special items, Southwest would have earned $97 million, or 13 cents per share. That's a penny per share more than expected by analysts surveyed by FactSet.
During the same period last year it lost $140 million, or 18 cents per share.
Revenue was the same as a year ago, at $4.31billion. That was a little lower than analysts had expected.
Southwest paid $3.16 per gallon for jet fuel during the quarter. It said it expects to pay an all-time high of $3.45 per gallon in the fourth quarter. That includes an expense of 9 cents per gallon for derivative contracts, known as fuel hedges, that may turn out to be money-losers based on current prices, the airline said.
