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Adjusted profit beats expectations with 11 cents per share

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Company expects record revenue and margin expansion in Q4

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Shares rise over 3% in after-hours trading

By Rajesh Kumar Singh

CHICAGO, Oct 22 (Reuters) - Southwest Airlines ( LUV )

reported an unexpected third-quarter profit on Wednesday, helped

by a pickup in travel demand and cost controls.

The Texas-based carrier said travel bookings turned higher

in early July and are expected to remain strong through

December. As a result, the company expects to deliver record

revenue in the fourth quarter, with a "meaningful" expansion in

its margin.

Southwest's ( LUV ) shares rose more than 3% in after-hours

trading.

Southwest ( LUV ), the biggest U.S. domestic carrier, has struggled

to find its footing after the COVID-19 pandemic and is

undergoing a major strategic transformation.

The airline has begun charging for checked bags, rolled out

a new basic-economy fare, and will switch to a new assigned seat

policy in January, replacing its previous open seating model.

It estimated revenue per available seat mile, or revenue

per seat, in the fourth quarter to rise 1% to 3% from a year

ago. Its non-fuel operating costs are expected to increase 1.5%

to 2.5% over the same period.

It reported an adjusted profit of 11 cents a share,

compared with analysts' average expectations of a loss of 3

cents, according to data compiled by LSEG. Operating revenue

totaled about $6.95 billion, compared with $6.29 billion

expected by analysts.

Its non-fuel operating costs rose 3.4% from the year-ago

period, compared with its forecast increase of up to 5.5%. The

airline attributed this to cost discipline across the

organization, reiterating its plan to slash $370 million in

expenses this year.