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Last Updated: Monday, 20 October, 2003, 17:33 GMT 18:33 UK
Southwest ahead of the pack
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Southwest pioneered the concept of no-frills flying
No frills airline Southwest has unveiled sharply higher profits, confirming its status as the only US carrier to sidestep the air travel slump.

The Texas-based company said profits for the three months to September came in at $106m (64m), up by 40% on the same period last year.

Sales also rose, climbing 12% on the year to $1.5bn.

The company's buoyant results contrast with news last week of a dip in quarterly profits from its full-service rivals Continental and Northwest.

Recovery mode

The air travel sector just starting to emerge from its worst-ever crisis, triggered by a dramatic fall in passenger numbers in the wake of the 11 September attacks.

A sharp slowdown in economic growth and a fresh fall in bookings during the run up to the Iraqi conflict this year put the industry under added pressure.

The downturn triggered the collapse of several airlines last year, including Switzerland's national carrier Swissair and its Belgian affiliate Sabena.

In the US, United Airlines filed for bankruptcy protection, while arch-rival American Airlines narrowly avoided the same fate.

Recession-proof

But Southwest, which thirty years ago developed the no-frills blueprint later copied by Easyjet and Ryanair in Europe, has bucked the gloomy trend with an unbroken run of quarterly profits over the last two years.

Analysts attribute company's resilience to its rock-bottom fares and its low cost base.

The company's policy of serving only domestic routes has also shielded it from the worst of the downturn in passenger numbers.

Southwest's record of prospering at the expense of its full service rivals has been replicated in Europe by Ryanair, which has notched up record sales and profits growth in the last two years.

Southwest took some of the gloss off its latest results by revealing that unit costs had risen by 2.3% in the third quarter, and said it expected further cost increases in the months ahead.

Southwest shares were up 2% in early trade on Wall Street.


SEE ALSO:
Student quizzed in US airline scare
18 Oct 03  |  Americas
Southwest defies airline gloom
21 Apr 03  |  Business
Ryanair 'to be bigger than BA'
03 Jun 03  |  Business


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