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Southwest comes back to the pack - The market favourite plumbs the depths

Southwest Airlines, whose share price is now sitting below USD10, well below its lowest levels post-September 11, is in danger of losing its market darling profile – and with it the prospect of being treated like just any other airline.

The halo that has surrounded the world’s model LCC has undoubtedly allowed it to float higher in the water than its fundamentals always promised. As fuel prices sink and Southwest’s image as an outrider to the industry diminishes, this will become an increasingly greater challenge for management.

Recent moves to link into international route networks, through codeshares, are one example of this – but each step in that direction tends to make Southwest look more like any other airline, again diluting its magic.

The past two months’ share price slide has an ominously steep slope to it.

Southwest Airlines daily share price (close): 17-Aug-01 to 17-Nov-08