Admitting it was unable to keep pace with rising fuel costs, Southwest Airlines yesterday reported a second-quarter net profit of $278 million that represented a 16.5% drop from earnings of $333 million in the second quarter of 2006. CEO Gary Kelly said the decline was "anticipated." Revenue climbed 5.5% to $2.58 billion but, Kelly said, "unit revenue production has not kept pace with rising fuel costs" as yield dropped and the economic fuel cost per gal. rose 14.1% year-over-year to $1.62. ...

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