Southwest's LUV ticker symbol can be seen as an homage to Dallas' Love Field, where it all started. Other airlines had moved to DFW Airport when the company was being formed, and for years it had the field -- with its location near the city center -- to itself.
Some think that what made Southwest special was its low prices, but that's not the story. What made Southwest special was its route system and cost structure.
Rather than flying everything into a single hub, where planes sat for hours as passengers moved between them, Southwest flies back and forth between cities and keeps planes on the ground as little as possible.
Southwest also sells seats only from its own Web site, keeping sales costs as low as possible. It has union contracts, and its labor costs are now competitive, perhaps even higher than those of other airlines. Its prices are similar to those airlines as well. But although its margins are small, it's consistently profitable.There is no "romance of the air" on Southwest. All the passengers know they're on a bus. But the crew keeps its sense of humor about things. The atmosphere is generally light. Competitors have copied Southwest in some ways. Delta's new safety video includes humorous elements. But flying on Southwest is a little like shopping at Costco (COST): You know the store is making money, but you also know neither you nor employees are being deliberately ripped-off. There is comfort in that. The stock will rise and fall with the investment winds, but mainly it will rise. And that's what you want out of your investments. At the time of publication the author owned shares of Costco.
Follow @danablankenhorn This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.
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