Southwest Airlines reports Q2 2016 net income of USD757m

Southwest Airlines Co. (NYSE: LUV) has reported its second quarter 2016 net income of USD757 million, compared with second quarter 2015 net income of USD691 million, the company said.

The company reported GAAP net income of USD820 million, compared with USD608 million in the second quarter 2015.

Record quarterly GAAP operating income was USD1.3 billion and second quarter 2016 operating income was also USD1.3 billion, resulting in an operating margin of 23.5 percent.

The company´s total operating revenues were USD5.4 billion, driven largely by second quarter 2016 passenger revenues of USD4.9 billion. Year-over-year, second quarter 2016 operating revenues grew 5.3 percent, and increased 0.6 percent on a unit basis.

Second quarter 2016 total operating expenses were USD4.1 billion, an increase of 2.0 percent, and a decrease of 2.6 percent on a unit basis, as compared with second quarter 2015.

As of June 30, 2016, the company said it had approximately USD3.4 billion in cash and short-term investments, and a fully available unsecured revolving credit line of USD1.0 billion. Net cash provided by operations during second quarter 2016 was USD1.1 billion, capital expenditures were USD462 million, and assets constructed for others, net of reimbursements, were USD1 million, resulting in free cash flow of USD649 million.

The company said it ended the second quarter 2016 with 719 aircraft in its fleet, representing the second quarter delivery of seven new Boeing 737-800s and six pre-owned Boeing 737-700s, as well as the retirement of eight Boeing 737 Classic aircraft. The company said it plans to end this year with 723 aircraft.