Southwest says demand recovered after April accident, shares rise

Southwest has overcome the business effects of a fatal mid-air engine explosion in April, CE Gary Kelly said on a conference call Thursday after reporting solid Q2 earnings that sent shares higher. An engine on one of Southwest’s Boeing 737 jets blew apart during a flight in April and killed one of 149 people aboard, triggering a drop in bookings and forcing the company to discount fares to attract flyers. Q2 passenger revenues declined by $100m as a result of the accident, but the carrier said it was encouraged by a solid rebound in demand and pointed to positive momentum going forward, despite higher fuel costs that have hit US airlines’ profitability. Southwest said it was trimming plans to boost seat capacity by about one point due in part to more costly fuel, which it sees rising to $2.25 a gallon in Q3 from $2.07 a gallon a year ago.<br/>