Southwest Airlines posted 2017 first-quarter net income of $351 million, down 31.6% from a net profit of $513 million in the 2016 March quarter, even as the Dallas-based carrier generated record first-quarter revenue of $4.9 billion, up 1.2% year-over-year (YOY).

First-quarter expenses increased 8.8% YOY to $4.2 billion as labor costs rose 12.6% to $1.7 billion and fuel costs heightened 8.2% to $922 million. Operating income was $658 million, down 30.3% from an operating profit of $944 million in the prior-year quarter.

Southwest’s first-quarter traffic rose 3.3% YOY to 29.3 billion RPMs on a 4.1% increase in capacity to 36.7 billion ASMs, producing a load factor of 79.9%, down 0.6 points. Yield dropped 2.6% to 15.1 cents.

Southwest took delivery of nine Boeing 737-800s and three 737-700s in the first quarter and is scheduled to take delivery of another 55 aircraft in 2017, comprising 30 737-800s, 11 737-700s and 14 737 MAX 8s. Its first 737 MAX 8 is scheduled to enter service Oct. 1.

Aaron Karp aaron.karp@penton.com