Higher Fuel and Labor Costs Hurt $LUV’s Profits

“DALLAS (AP) — Southwest Airlines Co. says fourth-quarter earnings fell by nearly half on higher spending for fuel, labor and maintenance.

The airline’s revenue rose slightly, however, as the average fare climbed almost $8 higher than a year ago.

Southwest also said that bookings for the first three months of 2013 look strong. It said that based onbookings and ticket prices so far, a key revenue measure should rise by 2 percent to 3 percent in January compared with the same month last year.

Southwest, the nation’s fourth-biggest airline, said Thursday that net income was $78 million, or 11 cents per share. That’s down from $152 million, or 20 cents per share, a year earlier.

Excluding items such as fuel contracts, the net income would have been 9 cents per share, beating the 7-cents-per-share forecast among analysts surveyed by FactSet.

Revenue ticked up 1.6 percent to $4.17 billion but fell short of the $4.20 billion that analysts expected.

Expenses rose faster, however, by 3.1 percent. That includes a 4.5 percent increase in labor costs and a 13 percent jump in maintenance as the airline continued to overhaul the cabins inside many of its planes….”

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