In a modest dose of good news for the beleaguered US airline industry, budget carrier Southwest Airlines has unveiled another profit, while Continental's losses have proved less grievous than feared.

Southwest, thanks to its discounting policy the only major airline to avoid losses since September 11, made $75m in the three months to the end of September.

And Continental, generally seen as one of the better-financed of the US-based international carriers, lost $37m in the same period - a fraction of the $924m losses reported by rival American Airlines on Wednesday.

Although Continental made a profit in the same quarter of 2001, the two periods are scarcely comparable, since its results were swollen by emergency US government funding.

Unlike nimble budget airlines, the bigger US carriers struggle with extremely high costs, and so have suffered especially sharply since the market slowdown took hold last year.

Good news, bad news

Southwest's result was not an unmixed success, however.

Southwest has remained profitable since September 11

In the same quarter of 2001, the firm earned $151m, more than twice as much.

Demand, the firm said, was growing only modestly, and the airline refused to predict whether or not it might produce a profit in the final quarter of the year.

Continental cannot be wholly encouraged by its modest loss. Although passenger numbers remained robust, its revenues eased as a result of the drastic fare-cutting all major airlines have pursued this year.

Set against that, the firm said its cost-cutting programme - which has not yet involved mass job losses - was exceeding expectations.