Only a true lunatic could like the airline business. Maybe that's why I like Richard Branson, founder of Virgin Airlines, and Herb Kelleher, founder of Southwest Airlines (NYSE:LUV), so much. They're loony tunes in the finest sense of the word, and they built impressive airline franchises in a time when seemingly everyone else went bankrupt once or twice.
In Southwest's case, it seems like the turbulence in the American airline industry isn't really making a dent. And why should it? Southwest is the acknowledged champion of low-fare air travel; the likes of AMR (NYSE:AMR), United, Northwest, and even Continental (NYSE:CAL) could only hope for that sort of sustainable success.
For this fourth quarter, Southwest saw operating revenue rise more than 20% as the company flew more flights, filled more seats, and charged more for it. Revenue passenger miles rose more than 15%, and the revenue yield climbed more than 4%. With available seat miles rising a little less than 8%, the load factor climbed 4.6 points to 69.6.
Despite fuel costs that rose nearly 39% per gallon (with hedging), operating income growth still surpassed revenue at almost 36%. That's pretty impressive, not only because it demonstrates excellent cost control, but because the company got saddled with a $24 million retroactive bill from the Transportation Safety Administration.
To be fair, Southwest isn't the only competently run airline -- I'd be remiss not to point out operators like British Airways (NYSE:BAB), Ryanair (NASDAQ:RYAAY), and perhaps even Air France KLM (NYSE:AKH), as well. And while I'm confident that Southwest's flying cattle cars will continue to deliver excellent value to flyers and shareholders alike, this whole schizoid industry gives me the willies at any price much above liquidation value.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
