Higher airfares and lower fuel prices combined to give Southwest Airlines $59 million in first-quarter net profits, or 8 cents a share, beating Wall Street's predictions.

The Dallas-based airline's earnings fell 40 percent from $98 million, or 13 cents a share, of a year ago. Revenue rose 2.3 percent to a record $4.1 billion. The report exceeded the First Call consensus estimate of 2 cents per share.


Southwest and its subsidiary AirTran Airways are the largest carriers at BWI Marshall Airport, accounting for 71 percent of all commercial passenger traffic. The merged companies are the nation's fourth-largest airline.

The average Southwest fare rose to $152.29, an increase of 4 percent from a year ago. First-quarter fuel costs were $3.29 per gallon, 4.4 percent lower than first quarter 2012's record high of $3.44 per gallon.

"We are pleased with the early results from revenue initiatives implemented in first quarter 2013 and are excited about the incremental benefit expected for future periods," CEO Gary Kelly said in a statement.

In the same announcement, the company unveiled a new no-show policy covering some customers who fail to cancel reservations they don't use. Beginning with reservations made on May 10 for cheaper, nonrefundable Wanna Get Away and Ding fares, no-shows will lose the value of the unused part of their itinerary and the rest of the reservation will be canceled.

The policy will not apply to military fares, senior fares or travel during severe weather. Passengers who cancel a Wanna Get Away or Ding fare prior to scheduled departure may apply their credit toward later travel on Southwest, without a change fee. Customers holding a fully refundable itinerary will continue to have the option of either requesting a refund or holding funds for future travel.

Meanwhile, Southwest reported 45,857 full-time equivalent employees in February 2013, 0.2 percent less than when it and AirTran Airways reported separately a year earlier, according to the U.S. Department of Transportation.

Six of the seven of the top U.S. airlines made money in the first three months of the year, the post-holiday period that is traditionally slow.

Southwest said that revenue was weaker than expected in March and April, but called bookings for May and June, "solid." Still, executives remained cautious about the rest of the year.

"Despite the uncertainties surrounding the impact to travel demand from government sequestration and increased consumer taxes, we remain focused on our 2013 plan to achieve a 15 percent pre-tax return on invested capital," Kelly said.

In 2012, Southwest earned $421 million, up from $178 million the year before and its 40th straight profitable year.