Southwest improves first quarter profit and readies for a showdown with Delta

When you exclude favorable special items over the last two years, Southwest improved its first quarter profits in 2013. It also clearly signalled it was ready to take on Delta for a larger piece of Atlanta and implement a previously announced no-show policy.

Southwest's net income for the first quarter of 2013 was $59 million, including $6 million in favorable special items, compared with $98 million in net income, including $116 million in favorable one-time items, in the first quarter of 2012.

The airline, however, produced only modest growth, 2.3%, in operating revenue in the first quarter of 2013 to $4.08 million.

Southwest attributed its results to revenue growth and "better-than-expected cost performance."

Taking on Delta in Atlanta

Meanwhile, Southwest says its integration with AirTran is going so well that in the fall of 2013, Atlanta, Delta's home turf, will become a Southwest "point-to-point operation ... similar to our other top ten Southwest cities."

Starting next month, Southwest says it will begin selling flights for travel beginning in November which "will offer our Atlanta Customers a wider selection of departure times throughout the day, with roughly the same number of daily departures.  We expect these changes will grow our local Atlanta traffic."

This comes as no surprise to Delta since AirTran already had a significant presence in Hartsfield-Jackson Atlanta Airport, although now the Southwest-Delta competition will heat up.

No show? No refund

In other news, Southwest's no-show policy will take effect for reservations made starting May 10, 2013, that aren't changed or canceled for travel beginning September 13, 2013.

Customers who buy nonrefundable and don't take the flight, or change or cancel it prior to departure, will lose the funds they paid under the new policy.

The no-show penalty won't apply to passengers who purchased fully refundable itineraries, who can optionally still request a refund or use the funds for future travel if their plans change. The no-show fee also won't be levied against travelers who purchased Wanna Get Away or DING! fares; they can change flights without a change fee or reuse the funds toward future travel.

In other words, the first two checked bags still fly free, but travelers who bought nonrefundable fares will pay a heavy penalty if they forget or neglect to cancel or change their flights before departure.