Southwest Airlines’ fuel costs to hit record high in 2012 – CEO

18 October 2012 22:25  [Source: ICIS news]

HOUSTON (ICIS)--Jet fuel costs in the fourth quarter could hit a record high for US Southwest Airlines, the company’s CEO said on Thursday.

The low-budget carrier posted a profit in the third quarter, which includes typically busier summer travel months, because it had less negative fuel-hedging impacts.

CEO Gary Kelly said that although Southwest’s performance in the third quarter was in line with the domestic industry, the carrier’s year-over-year unit revenue growth was slower than expected as the result of weaker demand, particularly in September.

Southwest’s third quarter jet fuel costs were $3.16/gal, which was in line with third quarter 2011, the company said in its earnings release.

"Crude oil and jet fuel prices have soared over the last several months, and our fourth quarter 2012 economic fuel costs are expected to hit an all-time high $3.45/gal,” said Kelly.

That number, he said, was based on market prices as of 15 October. 

“This is disappointing, especially given the weak economy, and we will need to more aggressively control costs in the next year,” continued Kelly.

($1 = €0.76)

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By: Anna Matherne

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