Southwest Airlines lost money for the first time in 17 years as falling oil prices forced the company to post the value of its fuel-hedging transactions in the third quarter, The Associated Press reported.

Southwest said today it lost $120 million in the three months that ended Sept. 30 even while revenues jumped 11.7 percent, the AP said.

The airline took $247 million in charges, mostly to write down fuel-hedging contracts that have plummeted in value since oil prices have plunged by nearly half since July, according to the AP.

The third-quarter loss came as the result of accounting rules that require Southwest to constantly update the potential value of some of its fuel-hedging contracts -- which were worth about $2.5 billion on Sept. 30, down from $6 billion on June 30, just before oil peaked at $147 a barrel, the AP said.

Southwest Chief Executive Gary Kelly told the AP in an interview that falling energy prices were "a very good thing for Southwest Airlines," as the company paid $2.44 a gallon for fuel during the third quarter -- far less than its competitors paid -- and expects to spend $2 a gallon in December.

Southwest has hedged large amounts of its fuel needs through 2012, which offers protection against another surge in oil prices, the AP reported.