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Southwest Airlines Friday reported first quarter net income of $11.8 million or 8 cents per share, down from $41.8 million or 28 cents per share in the same period a year ago.

Herbert D. Kelleher, chairman and chief executive officer of Dallas-based Southwest, said the lower earnings were in line with his expectations."While the quarter was solidly profitable, it was well below last year's record first quarter earnings performance," Kelleher said in a prepared statement.

"The anticipated softness in revenues and decline in earnings, similar to our fourth quarter 1994 performance, was principally caused by aggressive industry fare sales; increased shorthaul, low-fare competition; reservation system capacity constraints; and our own aggressive expansion."

But Kelleher said he is encouraged by several developments this year, including:

- Significant enhancements to Southwest's reservation system completed in the first quarter and now in operation;

- Yields per revenue passenger mile (RPM) have improved significantly since the last three months of 1994, helped by fare increases;

- New markets are developing "very well" with high load factors and steadily improving yields per RPM;

- Expansion of shorthaul, low-fare competition in Southwest's markets has stabilized and, in some cases, receded. (Continental Airlines recently announced it will discontinue its Continental Lite service."

Kelleher said he didn't expect to match last year's April load factor of 68.4 percent but noted that this month has so far been quite strong for Southwest.

He said bookings for May and June also suggest that the trend of increased business may continue but cautioned it is too early to say for certain how many tickets will be sold in those months.

Total operating revenues for the first quarter were $621.0 million, up from $619.4 million for the first quarter last year.

RPMs increased 3.3 percent while available seat miles (ASMs) rose 13.0 percent. Those figures resulted in a load factor of 61.1 percent, down from 66.9 percent in the same period last year. Passenger revenue yield per RPM decreased 3.2 percent from the 1994 first quarter.