Southwest Airlines Tops $1 Billion in Annual Profits for the First Time

DALLAS (The Dallas Morning News/TNS) -

Southwest Airlines said Thursday it earned a record $1.1 billion in 2014, the first time the Dallas-based carrier has gone over the $1 billion mark.

Its previous best year came in 2013, when its net income reached $754 million.

“Our strategic plan has come together successfully, and we have realized significant contributions from the AirTran integration, fleet modernization efforts and the continued growth of our Rapid Rewards program,” Southwest chairman and CEO Gary Kelly said in the airline’s announcement.

In the fourth quarter, Southwest earned $190 million, or 28 cents a share, on $4.63 billion in operating revenues. That compares to $212 million, or 30 cents a share, on $4.04 billion in revenues in the same quarter of 2013.

The quarter was marked by the end of its AirTran Airways unit, which flew its last flight Dec. 28. AirTran boosted Southwest’s earnings by $500 million in 2014, the company said.

Since Southwest announced the merger in September 2010 and closed the deal in May 2011, the AirTran integration has cost Southwest about $538 million

“The company expects total acquisition and integration costs to be approximately $550 million (before profit sharing and taxes) upon completing the transition of AirTran 717-200s out of the fleet in 2015,” the airline said.

In reviewing 2014’s major accomplishments, Kelly said, “We have been very pleased with the overall performance of our markets under development, most notably Dallas Love Field, New York LaGuardia, and (Washington) Reagan National.”

Kelly said Southwest employees will receive $355 million in profit sharing from 2014’s earnings. That compares to $228 million in profit sharing in 2013.