DALLAS (AP) – Southwest Airlines Co.'s fourth-quarter net income slipped 10 percent due to the effect of fuel-hedging contracts that lost value as oil prices tumbled.
Dallas-based Southwest on Thursday announced it earned $190 million, despite $282 million in write-downs on the fuel contracts.
Adjusted to exclude those and other one-time costs and gains, Southwest said adjusted profit was a record $404 million, or 59 cents per share. Revenue increased 4.5 percent to $4.63 billion.
Prices for oil and jet fuel have dropped in recent months. That reduces Southwest's spending. Labor surpassed fuel as the airline's biggest single expense in 2014.
Southwest expects to spend less than $1.90 per gallon in the January-through-March period, 40 percent less than a year ago.