Southwest Takes Off as Traffic, Fares Rise

[Stocks-to-Watch]

Southwest Airlines (LUV) strong traffic and higher fares helped the company overcome very high fuel prices in the fourth quarter, and shares were rising more than 3% in early trading Thursday.

Southwest posted 9 cents of EPS after excluding one-time items, 8 cents ahead of consensus estimates.

Southwest paid $3.29 per gallon for fuel, or 33.7% more than a year ago. But the company posted a strong load factor, which measures how full its airplanes are, of 80.5%, about the same as last year. And the average fare rose to $140.18 from $131.17 a year ago, a 6.9% increase. “Revenue passengers carried”, the number of paying passengers carried in the quarter, rose 23%.

The earnings are more evidence that the airline industry will likely be able to navigate a difficult economy. Other airlines also rose, with Delta (DAL) up 3.1%.



Original Article Source by Barrons.com