Earnings for Southwest and Continental came out today, and if there are two things to keep in mind when you hear about the numbers, these are them:
- You've probably seen it plastered all over the wires today . . . Southwest lost money in a quarter for the first time since the first Gulf War. Despite what others may say, this doesn't mean the world is ending. There were $247 million in charges mostly related to "mark-to-market adjustments on a portion of the future periods' fuel hedge portfolio." Without that non-cash accounting charge that revalues future fuel hedges at the current market rates, the airline was still profitable. Nothing to see here, keep moving.
- Continental lost $145 million excluding special items. That's not great, but remember that their Houston hub was hit pretty hard by Hurricane Ike. In fact, they estimate that it cost them about $50 million. Keep that in mind when reviewing their numbers.