Continental Airlines, United Airlines and Southwest Airlines all reported healthy third-quarter profits Thursday, but their executives are fretting about rising fuel costs. "I think the biggest wild card for us is: Tell us what fuel prices are," said Gary Kelly, Southwest's CEO. "If there's a concern in the plan next year, that's it." Southwest's fuel costs were $2.38 per gallon in the third quarter, and in the fourth quarter it expects to pay $2.45 to $2.50. United's overall expenses increased by $463 million compared wit

h the third quarter of 2009, and higher fuel costs accounted for $211 million of that increase. Continental's expenses increased by $263 million, and the airline attributed $103 million of that to pricier fuel. "The market is obviously very concerned about higher fuel costs," said Helane Becker, airline analyst with investment bank Dahlman Rose & Co. Houston-based Continental and Chicago-based United merged Oct. 1, so financial results won't be combined until the fourth quarter. Analysts expect to see increased costs related to the merger. Labor costs, for example, are expected to increase as the new airline negotiates with workers and merges its labor contacts, Standard & Poor's Ratings Services said Thursday. But the airline expects revenue will ris

e, too. It has announced increased service from the U.S. to Mexican destinations since Mexican carrier Mexicana went out of business. And it expects to earn more money off its ancillary revenue, such as fees for meals and checked bags. "We are just beginning to unlock the full potential of the new United," said Jeff Smisek, CEO of the merged airline. The industry overall is reporting healthier earnings for the July-September quarter, because higher-paying business and international travelers are returning to the air as the economy recovers. United reported net income of $387 million, or $1.75 per share, after losing $57 million in the third quarter of 2009. Continental earned $354 million, or $2.16 per share, compared with an $18 million loss during the third quarter of last year. United's third-quarter revenue was $5.4 billion, an increase of 21.7 percent over 2009. Continental's revenue rose 19.2 percent to $4 billion. Dallas-based Southwest reported third-quarter net income of $205 million, or 27 cents per diluted share, compared with a net loss of $16 million for third-quarter 2009. Southwest's third-quarter revenue rose 19.7 percent year-over-year to $3.2 billion. "Oh my, what a differenc

e a year makes," said Kelly, Southwest's CEO. Also reporting Thursday was New York-based JetBlue Airways, which earned $59 million in the third quarter, up from $15 million a year earlier. Along with their financial results, Continental and United announced new flights from their hubs. The two airlines won't operate as one until they receive a single operating certificate from the Federal Aviation Administration. Smisek said Thursday that could happen by late 2011. Continental will add flights from Houston to Bakersfield, Calif.; Palm Springs, Calif.; Cedar Rapids, Iowa; Grand Junction, Colo.; Hobbs, N.M.; Montreal; and Reno, Nev. From Cleveland, Continental will begin flights to Cincinnati, and from Newark, the carrier will begin service to Des Moines, Iowa. United plans new service from Washington Dulles International Airport to Louisville, Ky.; Minneapolis-St. Paul., Salt Lake City; Tulsa, Okla.; and Grand Cayman in the Cayman Islands. United will also start new service from Denver International Airport to Amarillo, Dallas Love Field and Lubbock; from Los Angeles to Austin, and from San Francisco to New Orleans. United's shares rose 17 cents to $27.80 Thursday. Southwest's stock rose 46 cents to $13.62.