Southwest Airlines reports a $161 million profit in the second quarter, makes a friendly overture to Airbus

Southwest Airlines (Dallas) reported second quarter 2011 net income of $161 million, or $.21 per diluted share, compared to net income of $112 million, or $.15 per diluted share, for second quarter 2010. Operating income was $207 million for second quarter 2011, compared to $363 million for second quarter 2010. The 2011 results include the results of AirTran since the May 2, 2011 acquisition date. Prior periods do not include AirTran’s results.

The Company has incurred $75 million in costs associated with the acquisition and integration of AirTran during 2011, of which $58 million were in second quarter 2011. The Company expects total acquisition and integration costs will be approximately $500 million. Including the anticipated benefit of net synergies, but excluding the impact of acquisition and integration costs, the Company expects the acquisition to be accretive to its fully-diluted earnings per share in 2011, as it was in second quarter 2011. The Company currently estimates that net annual pre-tax synergies will exceed $400 million by 2013.

Both periods’ results included special items related to non-cash, mark-to-market, and other items associated with a portion of the Company’s fuel hedge portfolio. In addition, second quarter 2011 results included approximately $40 million (net of taxes) in charges primarily related to financial advisory fees and severance payments in association with the Company’s acquisition and integration of AirTran. Excluding special items in both periods, second quarter 2011 net income was $121 million, or $.15 per diluted share, compared to $216 million, or $.29 per diluted share, for second quarter 2010.

AirTran is expected to operate under the AirTran brand for another couple of years, stations with a dual airline presence are being transitioned to locate ticket counters and gates in closer proximity. Southwest will begin transitioning aircraft, airports, and employees next year. Southwest expects to receive a single operating certificate (AOC) from the Federal Aviation Administration (FAA) in the first quarter 2012.

In other news, Southwest Airlines and Airbus have begun a cordial top-level exchange, prompting Airbus to hope Boeing’s biggest customer may eventually take an interest in its planes according to this report by Reuters.

Read the Reuters report: CLICK HERE

Southwest Slide Show: CLICK HERE

Copyright Photo: Tony Storck. Please click on the photo for information on this logojet.