Southwest Airlines posted a $16 million profit for the third quarter as revenues grew slower than expected due to weaker demand for air travel in September.
"While in line with the domestic industry, our third quarter 2012 year-over-year unit revenue growth was more sluggish than planned due to weaker demand, particularly in September," said Southwest chief executive Gary Kelly in a statement. "While the economy remains a significant concern, we are encouraged, thus far, by October's bookings and revenue trends."
Southwest's third-quarter profit compares to a $140 million loss in the third quarter last year. Revenues were flat at $4.3 billion.
Excluding $81 million of one-time accounting items, the carrier said it would have made $97 million, or 13 cents per share, matching Wall Street analysts estimates, according to FactSet Research.
The Dallas-based carrier said its operating costs grew in the third quarter as it has invested significant capital in its fleet modernization effort and so far has retrofitted 147 Boeing 737-700s with a new cabin interior.
Southwest said it paid $3.16 per gallon of jet fuel in the third quarter, two cents lower than the third quarter of 2011. However, it expects to pay $3.45 per gallon in the fourth quarter as the price of jet fuel continues to rise.
The company ended the quarter with $3.5 billion in cash and short-term investments.
Southwest also announced that it will convert four AirTran Airways cities - Charlotte, Flint, Mich., Portland, Maine, and Rochester - to Southwest service on April 14. Southwest purchased AirTran in 2011 for $1.4 billion.
Southwest executives was to hold a conference call with analysts and investors at 11:30 a.m. to discuss its earnings results.