Southwest Airlines Co.’s fourth-quarter profit rose 71 percent, topping analysts’ estimates, on lower jet fuel prices and solid demand across its U.S.-focused route network.

While jet fuel prices tumbled 32 percent in the quarter, Southwest said its spending for fuel declined just 15 percent because of hedging contracts that lock in rates in advance. Southwest has been adjusting some hedges to take greater advantage of the price decline, it said last month.

Southwest joined Delta Air Lines Inc. in reporting a profit above expectations for the period, while United Continental Holdings Inc. fell 2 cents short of analysts’ estimates. Analysts expect the six largest U.S. carriers will report a combined $2.7 billion in profits excluding one-time items, an industry high. American Airlines Group Inc. and others will report results next week.

Based on current fuel prices and Southwest’s existing hedging contracts, the airline expects to pay $1.90 for each gallon of fuel this quarter, down 40 percent from a year earlier. The savings will total $500 million year over year, Chief Executive Officer Gary Kelly said in a statement.

Southwest’s profit of $404 million, or 59 cents a share, excluding one-time items, compared with a 55-cent average estimate from 18 analysts compiled by Bloomberg. Sales rose to $4.63 billion, exceeding average analysts’ estimates of $4.59 billion.

About 97 percent of Southwest’s capacity is in the U.S., protecting it against sagging international demand and currency swings. Traffic, or miles flown by paying passengers, rose 4.3 percent in the quarter and the carrier filled an average 82 percent of its seats, a fourth-quarter record.

Lower fuel prices contributed to a 3.8 percent decline in Southwest’s costs for each seat flown a mile, a measure of efficiency.

The airline said it would pay out $355 million in profit sharing to employees, 56 percent more than in 2013, based on record full-year earnings of $1.4 billion, excluding one-time items.

This article was written by Mary Schlangenstein from Bloomberg and was legally licensed through the NewsCred publisher network.

Photo Credit: Southwest employees in a promotional image from its new brand launch. Southwest Airlines