Southwest Expects to Increase Earnings in Spite of Fuel Prices
Posted on: Thursday, 11 May 2006, 03:10 CDT
By Eric Torbenson, The Dallas Morning News
May 10--Southwest Airlines Co. chief financial officer Laura Wright told investors Wednesday that the carrier's goal of increasing earnings 15 percent remains achievable despite higher-than-expected fuel prices.
The strong revenue that airlines are enjoying has helped Southwest overcome its higher fuel bill for 2006, which is still substantially less than competitors because the Dallas-based carrier has pre-purchased about three-fourths of its jet fuel at prices far below spot market levels.
Ms. Wright told a Bear Stearns airline conference in New York that Southwest also is continuing to fight a $24 million "surprise" charge from the Transportation Security Administration that it believes was incorrectly levied against the carrier. Southwest hopes to get that money back.
Separately, American Airlines Inc. chairman and chief executive officer Gerard Arpey said his airline continues to improve operating performance and to lower costs not related to jet fuel.
The carrier has $700 million in cost-cutting efforts outlined this year and hopes to increase revenue by $300 million through new fees and more restrictive rules.
American has seen solid revenue growth when measured across all the seats the world's largest carrier flies. It pushed through another $5 per ticket fare increase over the weekend, and continues to see record travel demand.
E-mail etorbenson@dallasnews.com
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Source: The Dallas Morning News
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