Profile: Southwest Airlines Co. (LUV)

Southwest Airlines Co., incorporated in 1967, is a passenger airline that provides scheduled air transportation in the United States. As of December 31, 2009, the Company had 537 active Boeing 737 aircraft serving 68 cities in 35 states throughout the United States. The Company provides point-to-point service. As of December 31, 2009, the Company served 437 non-stop city pairs. Approximately 76 % of the Company’s customers flew non-stop during the year ended December 31, 2009, and the Company’s average aircraft trip stage length in 2009, was 639 miles with an average duration of approximately 1.8 hours. Southwest Airlines Co. complements short-haul routes with long-haul, nonstop service between markets, such as Los Angeles and Nashville, Las Vegas and Orlando, and San Diego and Baltimore. The Company’s point-to-point route structure includes service to and from many secondary or downtown airports, such as Dallas Love Field, Houston Hobby, Chicago Midway, Baltimore-Washington International, Burbank, Manchester, Oakland, San Jose, Providence, Ft. Lauderdale/Hollywood, and Long Island Islip airports.

In March 2009, the Company launched a southwest.com Website, which provides access to additional southwest.com products and services. The enhanced Website allows customers who access southwest.com from their Web-enabled mobile or handheld devices to book flights, check flight status, view flight schedules, and login to their frequent flyer account from their mobile devices. In March 2009, the Company launched a new Travel Guide on southwest.com, which provides a variety of benefits to assist customers in making travel plans. Travel Guide users can share their own travel experiences and view ratings, reviews, photos, and videos posted by fellow travelers of destinations, hotels, restaurants, and activities they recommend. In June 2009, the Company introduced its Grab Your Bag. It’s On campaign in order to connect with its customers during difficult economic times. In June 2009, the Company introduced charges for non-routine ancillary activities. In September 2009, the Company introduced EarlyBird Check-in, which allows customers to receive an automatically assigned boarding position before general check-in begins. During 2009, the Company offered customers the ability to book flights to Mexico on Volaris via an online link to Volaris’ booking portal on www.southwest.com.

The Company offers a frequent flyer program, Rapid Rewards, which allows customers to earn credits towards free flights based on trips flown. Rapid Rewards Members can earn a credit for each one-way trip flown or two credits for each roundtrip flown. They can also earn credits by using the services of non-airline Preferred Partners, which include car rental agencies, hotels, restaurants, and retail locations, as well as by using the Southwest Airlines Rapid Rewards Visa Signature Card. Rapid Rewards offers different types of travel award opportunities (Awards), including the Standard Award, the Freedom Award, and the Companion Pass. Rapid Rewards Members also have the opportunity to become A-List customers and receive priority boarding privileges.