Airline investors are used to disappointments--but not from Southwest Airlines. So when Southwest said Dec. 7 that fourth-quarter profits would fall below last year's, the stock plunged. The problem: competition, and Southwest's own missteps. When the airline launched fare sales in October, it failed to limit the number of the cheapest seats. It also suffered from the addition of 42 planes and from jammed reservations lines. Even so, says analyst Michael Derchin of NatWest Securities, the carrier remains "the strongest in the industry by far."
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