United Continental Holdings Inc. (NYSE: UAL) and Southwest Airlines Co. (NYSE: LUV) both reported fourth-quarter and full-year earnings before markets opened on Thursday. In the wake of Delta Air Lines Co.’s (NYSE: DAL) solid report earlier this week, both of these reports were expected to be upbeat.

United posted adjusted earnings per share (EPS) of $1.20 on revenues of $9.31 billion, compared with EPS of $0.65 and revenues of $9.33 billion in the year-ago fourth quarter. For the full year, adjusted EPS totaled $5.06 on revenues of $38.9 billion, compared with EPS of $2.73 on revenues of $38.28 billion. Consensus estimates called for quarterly EPS of $1.22 on revenues of $9.31 billion and full-year EPS of $5.09 on revenues of $38.91 billion.

United’s revenues from ancillary fees rose 9.7% in the quarter and fuel costs fell 14.7%. Operating expenses fell 4.5% overall, but without the fuel savings United might have had some trouble. Ancillary fee revenue totaled more than $22 per passenger and the company flew more than 33.5 million passengers on its mainline and regional flights. That pencils out to more than $735 million for baggage check fees, cold sandwiches and liquor. Operating income in the quarter totaled $625 million.

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United also paid $85 million for non-performing hedges and another $151 million for settled (ineffective) hedges that did not qualify for hedge accounting. Hedging losses cost United $0.23 per gallon of fuel, and raised the per gallon cost from $2.58 per gallon to $2.83 on 948 million gallons of jet fuel.

Southwest Airlines reported adjusted EPS of $0.59 on revenues of $4.63 billion. Analysts were expecting Southwest to post fourth-quarter EPS of $0.55 on revenues of $4.59 billion. In the fourth quarter of 2013, the airline posted EPS of $0.33 on revenues of $4.43 billion.

For the full year, Southwest revenues totaled $18.6 billion and EPS came in at $2.01, compared with estimates for $18.56 billion in revenues and EPS of $1.97. In 2013 the airline posted EPS of $1.12 on revenues of $17.7 billion.

Southwest expects first-quarter 2015 passenger revenues to rise by 6%, the same percentage increase as a projected increase in the airline’s available seat miles. The company also expects fuel costs to drop to around $1.90 a gallon in the first quarter, resulting in a $500 million year-over-year reduction in fuel costs. Fourth-quarter fuel costs dropped 14.6% compared with the same period in 2013. For the full year, fuel costs were 8.2% lower.

United has forecast a year-over-year first-quarter passenger revenue per available seat mile change in a range of -1% to +1% and a fuel cost in the range of $1.75 to $1.80 per gallon, excluding hedges. Including cash-settled hedges, the cost per gallon is forecast at $1.96 to $2.01. United also expects capital spending of $3.0 billion to $3.2 billion in 2015.

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Both airlines got a boost in share price before the markets opened Thursday morning. United’s stock traded up more than 3% at $71.40, which would break a 52-week high that the stock posted on Wednesday. The current 52-week range is $36.65 to $69.46. The consensus price target from Thomson Reuters was around $82.30 before the results were announced.

Southwest traded nearly 4% higher at $43.44, another new 52-week high if it holds through the opening bell. The current 52-week range is $20.22 to $43.19. The consensus price target on the stock is around $51.30.

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