July 23--In a sign that the good times are not over for the airline industry, two of the nation's largest carriers reported record quarterly profits Thursday, thanks partly to lower fuel costs and growing demand for air travel.
For the three months ended June 30, Southwest Airlines posted net income of $608 million, or 90 cents a share, compared to net income of $465 million, or 60 cents a share, in the same period last year.
Excluding one-time costs, the profits represent the all-time quarterly high and the ninth consecutive quarter of record profits for the Dallas-based carrier.
United Airlines reported a quarterly record of its own, announcing net income of $1.9 billion for the quarter, or $3.14 a share, compared to $789 million, or $2.01 a share, in the same period last year.
The airline industry has reported hefty profits over the last few years, partly because of a steep drop in the cost of fuel, which typically represents the largest expense for an airline.
Southwest reported a 29% decline in fuel costs for the quarter, with a 2% increase in passengers and revenue. Also contributing to a hefty bottom line, Southwest reported that 84.6% of all available seats were filled in the quarter, a new record.
Southwest added 10 planes to its fleet of about 700 planes, and predicts increased demand for international travel as the airline expands into Mexico and South America.
Although revenue at United fell by 4% for the quarter, fuel costs dropped by 32% compared to the same period in 2014. Ancillary fees, including charges for checked bags, food and entertainment, among other revenue, increased nearly 7% in the quarter.
During the second quarter, United invested $30 million in a company that hopes to make jet fuel from household trash and bought a 5% stake in a Brazilian airline.
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