Southwest Airlines Co. has just reported its outstanding third-quarter earnings of $584 million that resulted from plunging fuel prices and their rarely vacant airplane seats. Southwest's earnings could exceed $2 billion by the end of 2015.
The increase in earnings has been continuous in the past two years. The best quarters in the airline's history were just reflected in the recent 15 months. For 2015's second quarter, Southwest had a total of $608 million in earnings - the biggest profit it has ever made - according to The Dallas Morning News.
Southwest's stock increased more than 2 percent during the premarket trading.
"Obviously the big headline is a significant drop in fuel prices. That's what caused the surge in earnings year over year," according to Southwest Airlines CEO Gary Kelly, CNBC reported.
Kelly also added that most airlines in the United States have gone bankrupt due to soaring energy prices since the year 2000. Despite the lower fuel prices, airlines should still remain alert. "You have very healthy airlines for about two years. Our challenge is trying to anticipate what will happen next, and especially with energy prices," Kelly added.
Southwest recently opened a new international airport in Houston that travels directly to Mexico and the Caribbean that could increase passenger rates from 5 to 6 percent.
Southwest earnings have risen mainly because their fuel bill now only amounts to $936 million. Most of the airline's expenses are distributed towards salaries, wages and benefits that increased by 25 percent, according to The New York Times.
