Southwest Airlines revenue measure rises 2 percent
DALLAS (AP) — Southwest Airlines Co. said Thursday that a key revenue measure rose 2 percent in February despite a dip in traffic, indicating that the carrier is benefiting from higher fares.
Southwest, which also operates AirTran Airways, said traffic on the two carriers fell 2.3 percent last month compared with a year ago, as passengers flew a total of 7.06 billion miles.
Still, passenger revenue for each seat flying one mile increased over February 2012. That's a closely watched measure of pricing power in the airline industry.
Southwest doesn't disclose average fares on a monthly basis, but it reported recently that the average fare in the fourth quarter of 2012 rose 5.4 percent from a year earlier, to $148.02 each way. Airlines raised fares several times in 2011 and 2012, partly to offset high fuel costs, although there's been only one broad fare increase in 2013 and that one mostly targeted business travelers who buy last-minute tickets.
Dallas-based Southwest, the nation's fourth-biggest airline, reduced its passenger-carrying capacity in February by 3.1 percent, a sign that the company is worried about demand for air travel amid a sluggish economy.
The company flew 8 percent fewer flights, but the average trip was longer and Southwest has added larger planes, both of which would partly offset the reduction in capacity caused by operating fewer flights.
With capacity dropping faster than traffic, the average flight was slightly fuller — 75.8 percent, up from 75.2 percent in February 2012.
Shares of Southwest fell 4 cents to $12.01 in afternoon trading.