737max-13, originally uploaded by Southwest Airlines.

Southwest Airlines Company (Dallas) today reported its fourth quarter and full year 2011 results. Fourth quarter 2011 net income was $152 million, or $.20 per diluted share, which included $86 million (net) of favorable special items.This compared to net income of $131 million, or $.18 per diluted share, for fourth quarter 2010, which included favorable special items totaling $16 million (net). Excluding special items, fourth quarter 2011 net income was $66 million, or $.09 per diluted share, compared to net income of $115 million, or $.15 per diluted share, in fourth quarter 2010. This exceeded Thomson’s First Call mean estimate of $.08 per diluted share for fourth quarter 2011.

For the full year 2011, net income was $178 million, or $.23 per diluted share, which included $152 million (net) of unfavorable special items. This compared to $459 million, or $.61 per diluted share, for full year 2010, which included $91 million (net) of unfavorable special items. Excluding special items, full year 2011 net income was $330 million, or $.43 per diluted share, compared to net income of $550 million, or $.74 per diluted share, for full year 2010.

On May 2, 2011 Southwest acquired AirTran Airways, increasing the combined fleet by 140 aircraft.

The Company incurred $134 million in expenses (before taxes) associated with the acquisition and integration of AirTran during 2011, including $37 million in fourth quarter 2011. The Company expects total acquisition and integration expenses will be approximately $500 million.

In December, Southwest unveiled its fleet modernization plans, including the launch of the Boeing 737 MAX aircraft beginning in 2017, representing the fourth time as Boeing’s launch customer. The agreements with Boeing permits significant flexibility to replace the older, less efficient aircraft with new Boeing 737-700/800 aircraft and the B737-MAX aircraft. During 2012, WN will take delivery of 33 Boeing 737-800s, with the first delivery of the 737-800 model to Southwest is scheduled for March 2012. Earlier this week, WN announced the final prong of its fleet modernization plans. Leveraging the new Boeing Sky Interior from the 737-800 model, WN decided to retrofit its 737-700 fleet with an updated cabin interior. Evolve: The New Southwest Experience is a 737-700 cabin refresh intended to enhance customer comfort, personal space, and the overall travel experience. It allows for the added benefit of six additional seats, along with more climate-friendly and cost-effective materials.

Copyright Photo: Southwest Airlines. CEO Gary Kelly holds up a model of the new Boeing 737 MAX.

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