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Southwest Posts First Quarterly Loss In 17 Years

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The Tampa Tribune

Published: October 17, 2008

Southwest Airlines attributed the loss to a $247 million special accounting charge against its fuel-hedging program for the quarter, which ended Sept. 30. Those contracts are less valuable now that oil prices have plunged by nearly half since July.

Despite showing an operating profit for the 70th consecutive quarter, the special charge resulted in a $120 million net loss, or 22 cents a share, for the third quarter.

Southwest's fuel hedging program, under which it locks in contracts years in advance for a large percentage of its fuel supply, has helped the company out-perform its rivals.

"The main thing now is the recession and the impact on travel demand," Chief Executive Officer Gary Kelly said. "We haven't seen any impact yet. My biggest concern now is January."

Ted Jackovics

Revenue:

$2.89 billion

Up 11.7 percent from

$2.59 billion

Analysts' forecast:

$2.83 billion

Special charge:

$247 million

Net loss:

$120 million

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