Back when I was at Rice University, in the 1970s, Southwest flew a triangle from Dallas' Love Field to San Antonio to Houston's Hobby Airport. You didn't need a reservation. Planes left every hour, and stayed on the ground for just 10 minutes. A flight cost less than a bus ticket.
That triangle still defines Texas (many counties outside it saw their population peak a century ago), but Southwest has long moved beyond it.
Today many of those former hot pant-clad flight attendants are living in retirement communities. Southwest flies to almost all major markets, and recently announced it would add its first "international" flights -- to the Caribbean -- from Atlanta, starting in July.
Southwest has been fighting restrictions on flying out of Love Field since its founding, and those restrictions are only now being lifted, meaning the airline can fly to 12 additional destinations starting in November. Additional destinations will turn Love into something more like a traditional hub, leaving some to speculate that Southwest is losing what made it special.
What made it special, what makes it special, comes down to one word: consistency. You may not get rich on Southwest stock. Its heyday as an investment came in the 1990s while other airlines were floundering. But if you buy it and hold it, your patience will be rewarded. It's a stock to invest in, not to speculate on.
Southwest no longer has the big labor cost advantages it once did, but it has plans to keep the Boeing (BA) 737 as its sole plane well into the next decade. The airline says this keeps costs down, because it has to carry spare parts and train mechanics and flight crews for only for one type of plane.
Southwest has 583 Boeing 737s now, with an average age of 11.2 years. The airline also has orders and options to replace nearly all of them with more 737s.
Southwest has lately lost its place as Wall Street's favorite airline to Delta Air Lines (DAL), which after immense consolidation, labor strife, and a bankruptcy has gotten its act together. Delta's international network gives it a profitability advantage over Southwest, and over the last year its stock price has more than doubled. Southwest investors have done well, but their gains have been only 82%.