| Southwest Posts Third Quarter Net Loss |
Southwest Airlines reported a third quarter net loss of $120 million after special charges totaling $247 million primarily related to adjustments on the future periods' fuel hedge portfolio. This compares with net income of $162 million during the same period a year ago.
Southwest said, however, that it posted its 70th quarterly operating profit, with $86 million, down 65.7% from the $251 million reported during the same period last year. Operating revenues rose 11.7% to $2.89 billion from $2.59 billion in the third quarter of 2007. Operating expenses, meanwhile, rose 20% to $2.8 billion from $2.34 billion during the period.
"Although today's challenges are unprecedented, we are well-prepared and committed to achieving our long-term financial targets and preserving our financial strength," said Gary Kelly, chairman of the board, president, and chief executive officer. "Our unrestricted cash and short-term investment balance was $2.2 billion as of yesterday, including $1.1 billion in fuel derivative collateral deposits. Although our liquidity is healthy, we have made the prudent decision in today's unstable financial markets to access $400 million in additional cash through our bank revolving credit facility leaving $200 million still available. We remain financially conservative and well-prepared with our strong balance sheet and modest debt levels."
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