News Article - January 19 2006

Southwest Airlines adding two gates in Phila. for expansion
  Southwest Airlines, coming off a 33d consecutive profitable year in 2005, has leased two additional departure gates at Philadelphia International Airport, giving it a total of eight gates in two terminals and enabling it to expand its flight schedule here, airline officials said yesterday. Southwest also said yesterday that it made $86 million, or 10 cents a share, in 2005's fourth quarter, compared with $56 million, or 7 cents a share, in the year-earlier quarter, the best performance of any major airline to report results so far. Net income for the year was $548 million, or 67 cents a share, compared with $313 million, or 38 cents a share, in 2004. The Dallas airline said that fuel hedging, or agreeing to advance-purchase contracts, saved it $258 million in the quarter and $600 million for the year - meaning that it, too, would have lost money without the contracts.

   Southwest's revenue increased 20 percent in the last quarter and 16 percent for the year, the result of opening new routes, adding flights on existing routes, and increasing fares, the company said. Analysts expect that airlines collectively will report a net loss for 2005 but do better this year, fueled by strong demand that is allowing the airlines to raise fares. Earnings could be adversely affected by fuel costs, which are rising again after a period of relative stability in late 2005. Gary C. Kelly, Southwest's vice chairman and chief executive officer, said in a conference call with analysts that he hoped that the Philadelphia airport would have additional gates available for lease this year.

   Southwest, the nation's largest airline in terms of passengers carried, operates from six gates now. Airport officials said in the fall that they were working on a plan to move Delta Air Lines' operations to Terminal A-East, freeing up four gates for lease to Southwest in Terminal E. Southwest started flying from Philadelphia in May 2004, using four gates in Terminal E. The first two gates Southwest will get, around Feb. 1, will come from United Airlines. They are in Terminal D, where Southwest already has two gates. Southwest now has 58 flights a day from Philadelphia but could offer more than 100 if it had 12 gates. The airline typically uses a gate for 10 arrivals and departures a day.

   Southwest carried about 9 percent of the more than 29 million passengers that used Philadelphia airport in 2005. US Airways is still by far the airport's biggest carrier, with 60 percent of the passengers and 475 flights a day. Also yesterday, AMR Corp., American Airlines' parent, reported losses for the fourth quarter and 2005 as it struggled with higher fuel costs and competition from low-cost carriers, the company reported.

   AMR, based in Fort Worth, Texas, had a fourth-quarter net loss of $604 million, compared with a $387 million loss a year earlier. For the year, AMR lost $861 million, compared with a $761 million loss in 2004. The company said it paid $1.7 billion more for fuel last year than it did in 2004. Continental Airlines, based in Houston, reported Tuesday that it lost $43 million in the fourth quarter and $68 million for the year.

Source - Philadelphia Inquirer