=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/10/20/f= inancial0901EDT0034.DTL ---------------------------------------------------------------------- Monday, October 20, 2003 (AP) Low-fare airline's third-quarter earnings climb 41 percent, match expectati= ons (10-20) 10:04 PDT DALLAS (AP) -- Southwest Airlines Co.'s earnings climbed 41 percent due to strong demand for summer vacation travel, matching Wall Street expectations. Southwest, the largest U.S. low-fare carrier, said Monday it earned $106 million, or 13 cents per share, in the July-September period, up from $75 million, or 9 cents per share, in the year-ago quarter. The latest results matched the consensus forecast of analysts surveyed by Thomson First Call. Southwest said the profit would have been $50 million, or 6 cents per share, without federal government payments to help airlines after the 2001 terrorist attacks. It was the Dallas-based carrier's 50th straight profitable quarter. Revenue rose 11.6 percent to $1.55 billion from $1.39 billion a year earlier and was barely above the $1.53 billion forecast by analysts. Chief executive James F. Parker said profits rose "due to an improved post-war revenue environment and a weak year-ago performance. Summer demand for vacation travel was strong, resulting in a record July and very solid August." Parker said travel held up "reasonably well" after Labor Day but Septemb= er traffic was hurt by Hurricane Isabel. He said booking trends indicate that fourth quarter revenue will rise from a year ago although fall from the third-quarter levels, following the seasonal pattern in the industry. Parker said the company recently moved up the purchase of five Boeing 737-700 jets from 2005 and 2006 to next year and agreed to lease another jet next year. Those and other moves will boost aircraft deliveries next year to 47, which will increase the capacity of its fleet 7 percent next year and more than 10 percent in 2005. Southwest said the number of miles flown by paying passengers rose 7.7 percent from a year ago, outstripped a 3.4 percent increase in capacity. As a result, planes were slightly fuller, at 70.5 percent occupancy. Southwest also reported a 3.8 percent increase in revenue per mile flown. Expenses rose 5.2 percent to $1.37 billion in the third quarter, mostly due to higher labor and jet fuel costs. For the first nine months of the year, Southwest earned $376 million, or 46 cents per share, compared to $199 million, 25 cents per share, in 2002. Revenue rose 7.3 percent to $4.42 billion from $4.12 billion. Separately, the airline said it will no longer pay commissions on flights booked by travel agencies. "We waited this long to make the change in our commission policy to give all agencies -- large and small -- ample time to shift their business model to the industry norm of fee-based services," said Jim Parker, Southwest's chief executive officer and vice chairman. Southwest is the last major airline to stop paying travel agent commissions. The policy goes into effect Dec. 15. In third quarter 2003, Southwest's online bookings generated 55 percent = of the airline's revenues, while travel agency bookings accounted for about 15 percent. The change in the commission policy will save Southwest about $40 million annually, Parker said. In afternoon trading on the New York Stock Exchange, Southwest shares we= re up 40 cents at $18.80. On the Net: www.southwest.com =20 ---------------------------------------------------------------------- Copyright 2003 AP