Southwest last week recorded a loss of US$56 million in the fourth quarter of 2008, the second consecutive quarter loss, but still managed to make US$178 million in profits for the full year.

Southwest adds that without the cost of extraordinary items, like losses made on fuel hedges, it would have made a profit for the October to December quarter amounting to US$61 million.

“We are very proud to report another profitable year in one of the most difficult years in aviation's 100-year-plus history. We certainly had our challenges in 2008, but... [managed] to report our 36th consecutive year of profitability,” said Gary Kelly, Southwest CEO.

“Despite the difficult credit markets, we were able to boost our liquidity by $1.1 billion during fourth quarter 2008 through several financing transactions to end the year with $1.8 billion in unrestricted cash and short-term investments.

“Due to the rapid collapse in energy prices during fourth quarter 2008, we substantially reduced our net fuel hedge position to approximately 10% of our estimated fuel gallons in each year from 2009 through 2013,” he adds.

Southwest’s report of a full year figure in the black bucks the trend, after United Airlines and American Airlines reported massive losses for the year.

For the three months ending December 31st, 2008 Southwest reported operating revenues of US$2.7 billion, a 9.7% increase of 2007’s US$2.5 billion achievement.

In 2008, Southwest carried a total of 88.5 million revenue passengers, a dip of only 0.2% when compared to the 88.7 million carried in 2007.