Q. If Southwest Airlines Co. is so great, why haven't my shares done better? — L.C., via the Internet

A. The discount carrier lately has experienced some dubious firsts:

— It recorded its first quarterly net loss in 17 years in last year's third quarter, followed by another net loss in the fourth quarter. Besides the lagging economy, its previously successful strategy of using futures contracts to hedge against rising fuel prices became a money-losing proposition when oil prices collapsed.

— It will not increase the size of its fleet this year, the first year it has not done so. Seating capacity is being reduced by 4 percent and it sold some planes so it could lease them back and raise additional cash.

Shares of Southwest Airlines (LUV) are down 17 percent this year following declines of 29 percent last year and 20 percent in 2007.

Southwest features a good on-time-flight record, solid customer loyalty and one of the strongest financial positions in the airline industry.

Its average passenger revenue rose in January on reduced capacity. Lower fuel prices are advantageous longer-term, and some experts predict many airlines will make money in 2009.

Southwest has been moving into some larger, more competitive airports. It is entering Minneapolis, a longtime Northwest Airlines hub, this year and also won approval from a bankruptcy judge to pay $7.5 million for assets of ATA Airlines that include 14 take-off and landing slots at New York's LaGuardia Airport.

The airline has international ambitions, partnering with Volaris airlines to offer flights to Mexico in 2010 and with WestJet to offer travel to Canada this year.

Analyst ratings on Southwest stock consist of three "strong buys," one "buy," six "holds" and three "underperforms," according to Thomson Financial.

Southwest is investing $1 million to update safety manuals following a federal crackdown in 2007 in which the Federal Aviation Administration found the carrier hadn't made mandatory fuselage inspections. Southwest is battling the FAA over a $10.2 million penalty the agency proposed last year, contending that it isn't "fair or equitable based upon the facts."

Southwest did record a net profit for 2008, and earnings are expected to increase 55 percent in 2009, compared with the 11 percent gain projected for the regional airlines industry, according to Thomson. The five-year annualised return is projected at 10 percent, compared with 14 percent forecast for peers.

Andrew Leckey answers questions only through the column. Address inquiries to andrewinv@aol.com.