10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File No. 1-7259

Southwest Airlines Co.

(Exact name of registrant as specified in its charter)

TEXAS	74-1563240
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)
P.O. Box 36611, Dallas, Texas	75235-1611
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code:  (214) 792-4000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ  No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ¨No þ

Number of shares of Common Stock outstanding as of the close of business on October 19, 2011: 778,522,395

1 

Explanatory Note

Southwest Airlines Co. (Company) is filing this Amendment No. 1 (this “Form 10-Q/A”) to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, filed with the Securities and Exchange Commission on October 25, 2011 (the “Form 10-Q”), for the sole purpose of correcting certain technical and formatting errors within its Interactive Data File included in the Form 10-Q filing as Exhibit 101.

No other changes have been made to the Form 10-Q. This Form 10-Q/A continues to speak as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update any related disclosures made in the Form 10-Q.

2 

Item 6.                                   Exhibits

a)  Exhibits

2.1	Agreement and Plan of Merger among Southwest Airlines Co., AirTran Holdings, Inc., and Guadalupe Holdings Corp., dated as of September 26, 2010 (the schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K)(incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated September 26, 2010 (File No. 1-7259)).
3.1	Restated Articles of Incorporation of the Company effective February 3, 1994;
	Articles of Amendment to the Articles of Incorporation of the Company effective
	May 31, 1996; Articles of Amendment to the Articles of Incorporation of the Company
	effective July 2, 1998; Articles of Amendment to the Articles of Incorporation of the
	Company effective June 2, 1999; Articles of Amendment to the Articles of
	Incorporation of the Company effective May 24, 2001; Articles of Amendment to
	the Articles of Incorporation of the Company effective June 5, 2007 (incorporated by
	reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year
	ended December 31, 2009 (File No. 1-7259)).
3.2	Amended and Restated Bylaws of the Company, effective November 19,
	2009 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report
	on Form 8-K dated November 19, 2009 (File No. 1-7259)).
10.1	Supplemental Agreement No. 74 to Purchase Agreement No. 1810,
	dated January 19, 1994, between The Boeing Company and Southwest. (1) (2)
31.1	Rule 13a-14(a) Certification of Chief Executive Officer. (2)
31.2	Rule 13a-14(a) Certification of Chief Financial Officer. (2)
32.1	Section 1350 Certifications of Chief Executive Officer and Chief Financial
	Officer. (3)
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

(1)   Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

(2)   Previously filed on October 25, 2011 as part of the original filing of the Form 10-Q for the quarter ended September 30, 2011 (File 1-7259).

(3)   Previously furnished on October 25, 2011 as part of the original filing of the Form 10-Q for the quarter ended September 30, 2011 (File 1-7259).

3 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SOUTHWEST AIRLINES CO.
November 8, 2011	By	/s/   Laura Wright
		Laura Wright
		Chief Financial Officer
		(On behalf of the Registrant and in
		her capacity as Principal Financial
		and Accounting Officer)

4 

EXHIBIT INDEX

2.1	Agreement and Plan of Merger among Southwest Airlines Co., AirTran Holdings, Inc., and Guadalupe Holdings Corp., dated as of September 26, 2010 (the schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K)(incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K dated September 26, 2010 (File No. 1-7259)).
3.1	Restated Articles of Incorporation of the Company effective February 3, 1994;
	Articles of Amendment to the Articles of Incorporation of the Company effective
	May 31, 1996; Articles of Amendment to the Articles of Incorporation of the Company
	effective July 2, 1998; Articles of Amendment to the Articles of Incorporation of the
	Company effective June 2, 1999; Articles of Amendment to the Articles of
	Incorporation of the Company effective May 24, 2001; Articles of Amendment to
	the Articles of Incorporation of the Company effective June 5, 2007 (incorporated by
	reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year
	ended December 31, 2009 (File No. 1-7259)).
3.2	Amended and Restated Bylaws of the Company, effective November 19,
	2009 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report
	on Form 8-K dated November 19, 2009 (File No. 1-7259)).
10.1	Supplemental Agreement No. 74 to Purchase Agreement No. 1810,
	dated January 19, 1994, between The Boeing Company and Southwest. (1) (2)
31.1	Rule 13a-14(a) Certification of Chief Executive Officer. (2)
31.2	Rule 13a-14(a) Certification of Chief Financial Officer. (2)
32.1	Section 1350 Certifications of Chief Executive Officer and Chief Financial
	Officer. (3)
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

(1)   Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and has been filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

(2)   Previously filed on October 25, 2011 as part of the original filing of the Form 10-Q for the quarter ended September 30, 2011 (File 1-7259).

(3)   Previously furnished on October 25, 2011 as part of the original filing of the Form 10-Q for the quarter ended September 30, 2011 (File 1-7259).

5 

XML

Condensed Consolidated Statement of Operations (USD $) In Millions, except Per Share data	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
OPERATING REVENUES [Abstract]
Passenger	$ 4,014	$ 3,032	$ 10,829	$ 8,544
Freight	35	31	103	94
Other	262	129	618	352
Total operating revenues	4,311	3,192	11,550	8,990
OPERATING EXPENSES [Abstract]
Salaries, wages, and benefits	1,146	938	3,226	2,748
Fuel and oil	1,586	926	4,150	2,681
Maintenance materials and repairs	272	196	717	556
Aircraft Rental	90	43	214	135
Landing fees and other rentals	257	210	705	606
Depreciation, Depletion and Amortization, Nonproduction	191	161	523	469
Acquisition and integration	22	1	97	1
Other operating expenses	522	362	1,372	1,022
Total operating expenses	4,086	2,837	11,004	8,218
OPERATING INCOME (LOSS)	225	355	546	772
OTHER EXPENSES (INCOME) [Abstract]
Interest expense	50	43	143	126
Capitalized interest	(3)	(5)	(8)	(15)
Interest income	(1)	(2)	(8)	(9)
Other Nonoperating Income (Expense)	405	(13)	351	138
Total other expenses	451	23	478	240
INCOME (LOSS) BEFORE INCOME TAXES	(226)	332	68	532
PROVISION (BENEFIT) FOR INCOME TAXES	(86)	127	42	204
Net income (loss)	$ (140)	$ 205	$ 26	$ 328
Net income per share, basic	$ (0.18)	$ 0.27	$ 0.03	$ 0.44
Net income per share, diluted	$ (0.18)	$ 0.27	$ 0.03	$ 0.44
Weighted Average Number of Shares Outstanding, Diluted [Abstract]
Weighted average shares outstanding, basic	792	746	773	745
Weighted Average Number of Shares Outstanding, Diluted	792	747	774	746
Cash dividends declared per common share	$ 0.0045	$ 0.0045	$ 0.0135	$ 0.0135

XML

Condensed Consolidated Statement of Cash Flows (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES [Abstract]
Net income (loss)	$ (140)	$ 205	$ 26	$ 328
Adjustments to reconcile net income (loss) to cash provided by operating activities [Abstract]
Depreciation and amortization	191	161	523	469
Unrealized (gain) loss on fuel derivative instruments	393	(17)	274	171
Deferred Income Taxes and Tax Credits	(90)	20	33	96
Amortization of deferred gains on sale and leaseback of aircraft	(3)	(3)	(10)	(10)
Increase (Decrease) in Operating Capital [Abstract]
Accounts and other receivables	11	42	(96)	(66)
Other current assets	(42)	7	(180)	(6)
Accounts payable and accrued liabilities	(39)	(5)	266	189
Air traffic liability	(92)	(63)	485	379
Cash collateral received from (provided to) fuel derivative counterparties	(409)	15	(429)	150
Other, net	2	23	93	(408)
Net cash provided by (used in) operating activities	(218)	385	985	1,292
CASH FLOWS FROM INVESTING ACTIVITIES [Abstract]
Payments to acquire business, net of cash acquired	0	0	(35)	0
Purchases of property and equipment, net	(276)	(100)	(548)	(398)
Purchases of short-term investments	(1,525)	(1,151)	(4,788)	(4,331)
Proceeds from sales of short-term investments	1,664	939	4,414	3,484
Other, net	0	0	0	0
Net cash provided by (used in) investing activities	(137)	(312)	(957)	(1,245)
CASH FLOWS FROM INVESTING ACTIVITIES [Abstract]
Proceeds from Employee stock plans	4	10	35	45
Proceeds from credit line borrowing	0	0	0	(44)
Proceeds from termination of interest rate derivatives	0	0	76	0
Payments of long-term debt and capital lease obligations	(48)	(39)	(110)	(123)
Payments of long-term debt and capital lease obligations	0	0	(81)	0
Payments of cash dividends	(3)	(3)	(14)	(13)
Repurchase of common stock	(175)	0	(175)	0
Other, net	(2)	1	(4)	5
Net cash provided by (used in) financing activities	(224)	(31)	(273)	(130)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(579)	42	(245)	(83)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	1,595	989	1,261	1,114
CASH AND CASH EQUIVALENTS AT END OF PERIOD	1,016	1,031	1,016	1,031
CASH PAYMENTS FOR [Abstract]
Interest, net of amount capitalized	48	33	130	101
Income taxes	0	105	5	144
Supplemental Cash Flow Disclosures [Abstract]
Fair Value of common stock issued in connection with the business acquisition	0	0	523	0
Debt Conversion, Converted Instrument, Amount	$ 0	$ 0	$ 78	$ 0

XML

ACQUISITION AND RELATED MATTERS (Details) (USD $)	0 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2011 Years	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Acquisition of AirTran [Abstract]
Exchange ratio of AirTran stock to Southwest Airlines stock (in hundredths)				0.321
Cash payment per share of AirTran stock (in dollars per share)				$ 3.75
Business Combinations [Abstract]
Acquiree		AirTran Holdings, Inc.
Business Acquisition Effective Date Of Acquisition				May 2, 2011
Business Acquisition Period Results Included In Combined Entity		from May 2, 2011 through September 30, 2011
Business Acquisition Average Acquirer Stock Price Used To Determine Value				$ 11.90
Business Acquisition Acquiree Common Stock Value Assigned Per Share	7.57	7.57		7.57
Business Acquisition Acquiree Common Stock Value Assigned Total	1,000,000,000	1,000,000,000		1,000,000,000
Common stock issued to acquire business				44,000,000
Business Acquisition Number Of Shares Issued As Percentage Of Acquirer Common Shares Outstanding	5.60%	5.60%		5.60%
Business Acquisition, Cost of Acquired Entity, Cash Paid	518,000,000	518,000,000		518,000,000
Business Acquisition, Cost of Acquired Entity, Purchase Price	3,200,000,000	3,200,000,000		3,200,000,000
Cash Paid To Redeem Share Based Performance Awards		7,000,000
Debt Conversion, Converted Instrument, Shares Issued		7,000,000
Payments of Convertible Debt		0	0	81,000,000	0
Business Acquisition, Purchase Price Allocation, Status		Certain estimated values are not yet finalized
Business Acquisition, Purchase Price Allocation, Goodwill Amount	970,000,000	970,000,000		970,000,000
Business Acquisition, Purchase Price Allocation [Abstract]
Cash and cash equivalents	477,000,000	477,000,000		477,000,000
Restricted cash	6,000,000	6,000,000		6,000,000
Other current assets	234,000,000	234,000,000		234,000,000
Operating property and equipment	1,151,000,000	1,151,000,000		1,151,000,000
Goodwill	970,000,000	970,000,000		970,000,000
Deferred income taxes	163,000,000	163,000,000		163,000,000
Other identified intangibles	125,000,000	125,000,000		125,000,000
Other noncurrent assets	45,000,000	45,000,000		45,000,000
Long-term debt and capital leases, including current portion	(1,119,000,000)	(1,119,000,000)		(1,119,000,000)
Air traffic liability	(354,000,000)	(354,000,000)		(354,000,000)
Other liabilities assumed	(657,000,000)	(657,000,000)		(657,000,000)
Net assets acquired	1,041,000,000	1,041,000,000		1,041,000,000
Business Acquisition Purchase Price Allocation Deferred Income Taxes Asset Liability Net Adjustment	13,000,000	13,000,000		13,000,000
Acquired Finite-Lived Intangible Assets [Abstract]
Estimated fair value of asset/(liability)	125,000,000	125,000,000		125,000,000
Weighted average useful life	10
Accumulated amortization	16,000,000	16,000,000		16,000,000
Business Acquisition, Pro Forma Information [Abstract]
Total operating revenues		4,312,000,000	3,860,000,000	12,495,000,000	10,961,000,000
Net income (loss)		(157,000,000)	231,000,000	7,000,000	345,000,000
Net income per share, basic		$ (0.20)	$ 0.29	$ 0.01	$ 0.44
Net income per share, diluted		$ (0.20)	$ 0.29	$ 0.01	$ 0.44
Revenues		4,311,000,000	3,192,000,000	11,550,000,000	8,990,000,000
Acquisition and integration		22,000,000	1,000,000	97,000,000	1,000,000
Net income (loss)		(140,000,000)	205,000,000	26,000,000	328,000,000
Internal Revenue Service (IRS) [Member]
Operating Loss Carryforwards [Line Items]
Federal net operating loss carryforwards	542,000,000	542,000,000		542,000,000
Federal loss carryforwards expiration date	between 2017 and 2029
Deferred Tax Assets, Operating Loss Carryforwards	190,000,000	190,000,000		190,000,000
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Abstract]
Estimated fair value of asset/(liability)	39,000,000	39,000,000		39,000,000
Weighted average useful life	4
Accumulated amortization	8,000,000	8,000,000		8,000,000
Acquired Finite Lived Intangible Asset Adjustment, Customer Relationships	7,000,000	7,000,000		7,000,000
Trademarks [Member]
Acquired Finite-Lived Intangible Assets [Abstract]
Estimated fair value of asset/(liability)	36,000,000	36,000,000		36,000,000
Weighted average useful life	3
Accumulated amortization	5,000,000	5,000,000		5,000,000
Domestic Slots [Member]
Acquired Finite-Lived Intangible Assets [Abstract]
Estimated fair value of asset/(liability)	43,000,000	43,000,000		43,000,000
Weighted average useful life	24
Accumulated amortization	1,000,000	1,000,000		1,000,000
Internally developed software [Member]
Acquired Finite-Lived Intangible Assets [Abstract]
Estimated fair value of asset/(liability)	2,000,000	2,000,000		2,000,000
Weighted average useful life	2
Accumulated amortization	1,000,000	1,000,000		1,000,000
Noncompete Agreements [Member]
Acquired Finite-Lived Intangible Assets [Abstract]
Estimated fair value of asset/(liability)	5,000,000	5,000,000		5,000,000
Weighted average useful life	2
Accumulated amortization	1,000,000	1,000,000		1,000,000
Lease agreements, asset [Member]
Acquired Finite-Lived Intangible Assets [Abstract]
Estimated fair value of asset/(liability)	2,000,000	2,000,000		2,000,000
Weighted average useful life	9
Lease Agreements Total [Member]
Finite Lived Intangible Assets Future Amortization Expense [Line Items]
Future Amortization (Income) Expense, Remainder of Fiscal Year	(10,000,000)
2012 Amortization (income) expense	(39,000,000)
2013 Amortization (income) expense	(39,000,000)
2014 Amortization (income) expense	(39,000,000)
2015 Amortization (income) expense	(39,000,000)
2016 Amortization (income) expense	(39,000,000)
2017 and thereafter Amortization (income) expense	(155,000,000)
Acquired Finite-Lived Intangible Assets [Abstract]
Weighted average useful life	10
Amortization (income) expense, Intangible Assets		(10,000,000)		(16,000,000)
Leases agreements, liability [Member]
Acquired Finite-Lived Intangible Assets [Abstract]
Estimated fair value of asset/(liability)	(376,000,000)	(376,000,000)		(376,000,000)
Weighted average useful life	10
Acquired Finite Lived Intangible Assets Total [Member]
Finite Lived Intangible Assets Future Amortization Expense [Line Items]
Future Amortization (Income) Expense, Remainder of Fiscal Year	9,000,000
2012 Amortization (income) expense	20,000,000
2013 Amortization (income) expense	15,000,000
2014 Amortization (income) expense	11,000,000
2015 Amortization (income) expense	9,000,000
2016 Amortization (income) expense	7,000,000
2017 and thereafter Amortization (income) expense	38,000,000
Acquired Finite-Lived Intangible Assets [Abstract]
Amortization (income) expense, Intangible Assets		9,000,000		16,000,000
AirTran Airways [Member]
Business Acquisition, Pro Forma Information [Abstract]
Revenues		758,000,000		1,300,000,000
Net income (loss)		$ 3,000,000		$ (24,000,000)

XML

Document And Entity Information (USD $)	3 Months Ended
	Sep. 30, 2011
Document And Entity Information [Abstract]
Entity Registrant Name	Southwest Airlines Co
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0000092380
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding	778,522,395
Public Float	$ 9,119,884,998
Document Type	10-Q
Document Period End Date	Sep. 30, 2011
Amendment Flag	true
Amendment Description	Resubmit Interactive Data files for the sole purpose of correcting certain technical and formatting errors.
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3

XML

COMPREHENSIVE INCOME (LOSS) (Details) (USD $) In Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Comprehensive income (loss) [Abstract]
Net income (loss)	$ (140)	$ 205	$ 26	$ 328
Unrealized gain (loss) on fuel derivative instruments, net of deferred taxes	(372)	199	(219)	160
Unrealized gain (loss) on interest rate swaps, net of deferred taxes	(30)	(12)	(34)	(34)
Other, net of deferred taxes	(4)	1	2	(1)
Total Other comprehensive income	(406)	188	(251)	125
Total comprehensive income	(546)	393	(225)	453
Deferred taxes on unrealized gain (loss) on fuel derivative instruments	(233)	124	(137)	100
Deferred taxes on unrealized gain (loss) on interest rate derivative instruments	(19)	(7)	(22)	(21)
Deferred taxes on Other	(3)	1	1	0
Accumulated Other Comprehensive Income Loss Net of Tax [Line Items]
Beginning Balance	(107)		(262)
2011 changes in fair value	(451)		(329)
Reclassification to earnings	45		78
Ending Balance	(513)		(513)
Fuel hedge derivatives [Member]
Accumulated Other Comprehensive Income Loss Net of Tax [Line Items]
Beginning Balance	(97)		(250)
2011 changes in fair value	(417)		(297)
Reclassification to earnings	45		78
Ending Balance	(469)		(469)
Interest rate derivatives [Member]
Accumulated Other Comprehensive Income Loss Net of Tax [Line Items]
Beginning Balance	(38)		(34)
2011 changes in fair value	(30)		(34)
Reclassification to earnings	0		0
Ending Balance	(68)		(68)
Other [Member]
Accumulated Other Comprehensive Income Loss Net of Tax [Line Items]
Beginning Balance	28		22
2011 changes in fair value	(4)		2
Reclassification to earnings	0		0
Ending Balance	$ 24		$ 24

XML

LONG-TERM DEBT

0 Months Ended

Sep. 30, 2011

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

8. AIRTRAN LONG-TERM DEBT

As discussed in Note 2, in connection with the acquisitionof AirTran, the Company became the holder of $1.1 billion of debt previously issued by AirTran Holdings. Subsequent to the acquisition date, holders of all of the approximately $70 million (par value) in 5.5% convertible notes due 2015 converted such securities receiving $73 million in cash and 6.2 million shares of Southwest Airlines common stock. All of the approximately$5 million (par value) of7.0% convertible notes due 2023were called by Southwest and fully repaid with cash. In addition, the Company terminated AirTran's $100 millioncombined revolving credit and letter of credit facility. As of September 30,2011, the following debt remained outstanding (in millions):

(In millions)		September 30, 2011
B737 Aircraft Purchase Financing Facilities:
Floating-rate aircraft notes payable through 2020, 1.91 percent
weighted-average interest rate as of September 30, 2011	$	616
Fixed-rate aircraft notes payable through 2018, 7.02 percent
weighted-average interest rate as of September 30, 2011		43
Fixed-rate B717 aircraft notes payable through 2017, 10.43 percent
weighted-average interest rate as of September 30, 2011		78
5.25% convertible senior notes due 2016		119
Total long-term debt		856
Less current maturities of long-term debt		(75)
Long-term debt less current maturities	$	781

As discussed further in Note 5, a portion of the above floating-rate debt has been effectively converted to a fixed rate via interest rate swap agreements which expire between 2016 and 2020. 

As of September 30, 2011, aggregate principal maturities of AirTran debt and capital leases (not including amounts associated with interest rate swap agreements and interest on capital leases) were $24 million for the remainder of 2011, $66 million in 2012, $77 million in 2013, $76 million in 2014, $90 million in 2015, $193 million in 2016, and $320 million thereafter.

At September 30, 2011, the net book value of the assets pledged as collateral for the AirTran B737 and B717 aircraft notes payable, primarily aircraft and engines, was $922 million.

B737 Aircraft purchase financing facilities

For purposes of financing the future acquisition of B737 aircraft from Boeing, AirTran has previously entered into aircraft purchase financing facilities. As of September 30, 2011, a total of 30 aircraft were financed under these debt facilities.

As of September 30, 2011, 27 B737 aircraft were financed under floating-rate facilities. Each note is secured by a first mortgage on the aircraft to which it relates. The notes bear interest at a floating rate per annum equal to a margin plus the three or six-month LIBOR in effect at the commencement of each semi-annual or three-month period, as applicable. Payments of principal and interest under the notes are payable semi-annually or every three months as applicable. As of September 30, 2011, the remaining debt outstanding may be prepaid without penalty under all aircraft loans provided under such facilities with the exception of two aircraft loans. Under the aircraft loans for such two aircraft, the right to prepay without penalty commences on the second anniversary, March 2012, or third anniversary, January 2013, of the date such loans were made. The notes mature in years 2016 to 2020. 

As of September 30, 2011, three B737 aircraft were financed under a fixed-rate facility. Each note is secured by a first mortgage on the aircraft to which it relates. Payments of principal and interest under the notes are payable semi-annually. The remaining debt outstanding may be prepaid without penalty. The notes mature in years 2016 to 2018.

Fixed-rate B717 aircraft notes payable

As of September 30, 2011, eight B717 aircraft were pledged as collateral for the obligations related to enhanced equipment trust certificates (EETCs). Principal and interest payments on the EETCs are due semi-annually through April 2017.

5.25% Convertible senior notes

In October 2009, AirTran completed a public offering of $115million of convertible senior notes due in 2016. The net proceeds from the offering were used for general corporate purposes. Such notes bear interest at 5.25 % payable semi-annually, in arrears, on May 1 and November 1. As a result of the acquisition, the 5.25% convertible senior notes are convertible into AirTran conversion units of 164.136per $1,000 in principal amount of such notes. This is equal to shares of Southwest Airlines common stock at a conversion rate of 52.6877shares and $615.17in cash per $1,000 in principal amount of such notes. This conversion rate is subject to adjustment under certain circumstances such as: granting of stock and cash dividends, a make-whole fundamental change of ownership provision, the issuance of rights or warrants, and/or a distribution of capital stock. Subsequent to the acquisition, holders of $5 million in principal amount elected to convert their notes.Remaining holders may convert their 5.25% convertible senior notes into shares of common stock at their option at any time. The 5.25% convertible senior notes are not redeemable at the Company's option prior to maturity. The holders of the 5.25% convertible senior notes may require the Company to repurchase such notes, in whole or in part, for cash upon the occurrence of a fundamental change, as defined in the governing supplemental indenture, at a repurchase price of 100 percent of the principal amount plus any accrued and unpaid interest.

As a result of triggering the fundamental change of ownership provision in the 5.25% convertible senior notes andas a result of the acquisition, an embedded conversion option is deemed to exist. In accordance with applicable accounting guidance,the embedded conversion option is required to be separated and accounted for as a free-standing derivative.A fair value calculation, utilizing similar market yields and the Southwest Airlines common stock price, was performed for the debt with and without the equity to measure the equity component.The value allocated to the conversion optionof $35 million is classified as permanent equity. The estimated premium associated with the notes excluding the equity feature was $10 million,and is being amortized to interest expense over the remaining life of the notes.

The dilutive effect of the shares that would be issued if the convertible notes were converted is included in the Company's dilutive net income per share calculation, unless such conversion would be considered antidilutive. See Note4.

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OTHER ASSETS AND LIABILITIES (Details) (USD $) In Millions	Sep. 30, 2011	Dec. 31, 2010
Other Assets [Abstract]
Fuel derivative contracts	$ 0	$ 307
Intangible assets	168	60
Non-current investments	112	97
Other	207	142
Other assets total	487	606
Accrued Liabilities, Current [Abstract]
Retirement plans	83	171
Aircraft rentals	107	27
Vacation pay	239	200
Advances and deposits	39	33
Fuel derivative contracts	116	79
Workers compensation	155	142
Deferred taxes	159	0
Other	295	211
Accrued liabilities	1,193	863
Other Liabilities, Noncurrent [Abstract]
Postretirement obligation	105	91
Non-current leasehold interest	337	0
Construction obligation	152	86
Other	332	288
Other non-current liabilities	$ 926	$ 465

XML

FINANCIAL DERIVATIVE INSTRUMENTS (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended								3 Months Ended				9 Months Ended		3 Months Ended				9 Months Ended				3 Months Ended				9 Months Ended				3 Months Ended		9 Months Ended																																		9 Months Ended				3 Months Ended								9 Months Ended				3 Months Ended				9 Months Ended																	3 Months Ended				9 Months Ended				3 Months Ended		9 Months Ended	3 Months Ended				9 Months Ended					0 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Dec. 31, 2010	Sep. 30, 2011 2011 [Member] FuelGallons	Sep. 30, 2011 2012 [Member] FuelGallons	Sep. 30, 2011 2013 [Member] FuelGallons	Sep. 30, 2011 2014 [Member] FuelGallons	Sep. 30, 2011 2015 [Member] FuelGallons	Sep. 30, 2011 Fuel derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other comprehensive income [Member]		Sep. 30, 2010 Fuel derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other comprehensive income [Member]		Sep. 30, 2010 Fuel derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other comprehensive income [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Fuel and oil [Member]		Sep. 30, 2010 Fuel derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Fuel and oil [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Fuel and oil [Member]		Sep. 30, 2010 Fuel derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Fuel and oil [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2010 Fuel derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2010 Fuel derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]	Sep. 30, 2010 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]	Sep. 30, 2011 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]	Sep. 30, 2010 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]	Sep. 30, 2011 Fuel derivative contracts [Member] Designated as Hedging Instrument [Member] Other Current Assets [Member]		Dec. 31, 2010 Fuel derivative contracts [Member] Designated as Hedging Instrument [Member] Other Current Assets [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Designated as Hedging Instrument [Member] Other assets [Member]		Dec. 31, 2010 Fuel derivative contracts [Member] Designated as Hedging Instrument [Member] Other assets [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Designated as Hedging Instrument [Member] Accrued liabilities [Member]		Dec. 31, 2010 Fuel derivative contracts [Member] Designated as Hedging Instrument [Member] Accrued liabilities [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Designated as Hedging Instrument [Member] Other deferred liabilities [Member]		Dec. 31, 2010 Fuel derivative contracts [Member] Designated as Hedging Instrument [Member] Other deferred liabilities [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Other Current Assets [Member]		Dec. 31, 2010 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Other Current Assets [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Other assets [Member]		Dec. 31, 2010 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Other assets [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Accrued liabilities [Member]		Dec. 31, 2010 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Accrued liabilities [Member]		Sep. 30, 2011 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Other deferred liabilities [Member]		Dec. 31, 2010 Fuel derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Other deferred liabilities [Member]		Sep. 30, 2011 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member]		Sep. 30, 2010 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member]		Sep. 30, 2011 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other comprehensive income [Member]		Sep. 30, 2010 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other comprehensive income [Member]		Sep. 30, 2011 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Interest expense [Member]		Sep. 30, 2010 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Interest expense [Member]		Sep. 30, 2011 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Interest expense [Member]		Sep. 30, 2010 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Interest expense [Member]		Sep. 30, 2011 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2010 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2011 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2010 Interest rate derivative contracts [Member] Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2011 Interest rate derivative contracts [Member] Designated as Hedging Instrument [Member] Other Current Assets [Member]	Dec. 31, 2010 Interest rate derivative contracts [Member] Designated as Hedging Instrument [Member] Other Current Assets [Member]	Sep. 30, 2011 Interest rate derivative contracts [Member] Designated as Hedging Instrument [Member] Other assets [Member]	Dec. 31, 2010 Interest rate derivative contracts [Member] Designated as Hedging Instrument [Member] Other assets [Member]	Sep. 30, 2011 Interest rate derivative contracts [Member] Designated as Hedging Instrument [Member] Accrued liabilities [Member]	Dec. 31, 2010 Interest rate derivative contracts [Member] Designated as Hedging Instrument [Member] Accrued liabilities [Member]	Sep. 30, 2011 Interest rate derivative contracts [Member] Designated as Hedging Instrument [Member] Other deferred liabilities [Member]	Dec. 31, 2010 Interest rate derivative contracts [Member] Designated as Hedging Instrument [Member] Other deferred liabilities [Member]	Sep. 30, 2011 Interest rate derivative contracts [Member] Derivatives Not in Cash Flow Hedging Relationships [Member] Other deferred liabilities [Member]	Sep. 30, 2011 Designated as Hedging Instrument [Member]	Dec. 31, 2010 Designated as Hedging Instrument [Member]	Sep. 30, 2011 Derivatives Not in Cash Flow Hedging Relationships [Member]	Dec. 31, 2010 Derivatives Not in Cash Flow Hedging Relationships [Member]	Sep. 30, 2011 Derivatives in Cash Flow Hedging Relationships [Member]		Sep. 30, 2010 Derivatives in Cash Flow Hedging Relationships [Member]		Sep. 30, 2011 Derivatives in Cash Flow Hedging Relationships [Member]		Sep. 30, 2010 Derivatives in Cash Flow Hedging Relationships [Member]		Sep. 30, 2011 Derivatives in Cash Flow Hedging Relationships [Member] Other comprehensive income [Member]	Sep. 30, 2010 Derivatives in Cash Flow Hedging Relationships [Member] Other comprehensive income [Member]	Sep. 30, 2011 Derivatives in Cash Flow Hedging Relationships [Member] Other comprehensive income [Member]	Sep. 30, 2011 Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2010 Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2011 Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2010 Derivatives in Cash Flow Hedging Relationships [Member] Other (gains) losses, net [Member]		Sep. 30, 2010 Other comprehensive income [Member]	Sep. 30, 2011 Counterparty A [Member]		Sep. 30, 2011 Counterparty B [Member]		Sep. 30, 2011 Counterparty C [Member]		Sep. 30, 2011 Counterparty D [Member]		Sep. 30, 2011 Counterparty E [Member]		Sep. 30, 2011 Counterparty Other [Member]
Percent Of Estimated Fuel Consumption Covered By Fuel Derivative Instruments [Line Items]
Percent of Fuel Consumption Hedged (in hundredths)	39.00%		39.00%
Volume of Fuel Hedging [Line Items]
Fuel Hedged						177,000,000	1,341,000,000	969,000,000	777,000,000	357,000,000
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value	$ 862		$ 862		$ 1,413																																$ 0	[1]	$ 151	[1]	$ 0	[1]	$ 547	[1]	$ 71	[1]	$ 122	[1]	$ 361	[1]	$ 71	[1]	$ 0	[1]	$ 164	[1]	$ 0	[1]	$ 212	[1]	$ 257	[1]	$ 40	[1]	$ 109	[1]	$ 33	[1]																									$ 1	$ 73	$ 63	$ 0	$ 0	$ 0		$ 0	$ 0	$ 496	$ 964	$ 366	$ 449
Derivative Liability, Fair Value	1,597		1,597		1,202																																0	[1]	16	[1]	0	[1]	88	[1]	138	[1]	18	[1]	157	[1]	9	[1]	0	[1]	284	[1]	0	[1]	304	[1]	525	[1]	222	[1]	635	[1]	257	[1]																									6	0	0	0	0	0	136	4		437	135	1,160	1,067
Cash collateral deposits provided to counterparty - noncurrent	246		246		125
Cash collateral deposits provided to counterparty - current	212		212		0
Cash collateral deposits held from counterparty - noncurrent	0		0		60
Cash collateral deposits held from counterparty - current	0		0		0
Due to third parties for settled fuel contracts	10	0	10	0
Receivable from third parties for settled fuel contracts	0		0		1
Net unrealized (gains) losses from fuel hedges, net of tax	469		469		250
Derivative Instruments, Gain (Loss) [Line Items]
Amount of (Gain) Loss Recognized in AOCI on Derivatives (effective portion)											417	[2]	(122)	[2]	66	[2]													297	[2]																																							34	[2]	34	[2]	30	[1]	12	[2]																																		78	[3]	226	[3]	447	(110)	331					127	[4]	26	[4]	100
Amount of (Gain) Loss Reclassified from AOCI into Income (effective portion)																	45	[2],[3]	77	[2],[3]	78	[2],[3]	226	[2],[3]																																																					0	[3]	0	[3]	0	[3]	0	[3]																						45	[3]	77	[3]								85	[4]	(24)	[4]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	393	(17)	274	171																					85	[4]	(24)	[4]	127	[4]	26	[4]	284	(26)	129	13																																																	0	[4]	0	[4]	0	[4]	0	[4]
Premiums paid for fuel derivative contracts during the period	36	37	93	98
Current Unrealized Net Gains (Losses) in OCI	(228)		(228)
Cumulative ineffectiveness recognized for unsettled hedges	(198)
Derivative [Line Items]
Derivative, Underlying Risk	interest rate
Derivative, Hedge Designation	cash flow
Derivative, Description of Hedged Item	AirTran has also entered into a number of interest rate swap agreements, which convert a portion of AirTran’s floating-rate debt to a fixed-rate basis for the remaining life of the debt, thus reducing the impact of interest rate changes on future interest expense and cash flows. Under these agreements, which expire between 2016 and 2020, the Company pays fixed rates between 4.34 percent and 6.435 percent and receives either three-month or six-month USD London Interbank Offered Rate (LIBOR) on the notional values.
Derivative, Notional Amount	451		451
Derivative, Type of Interest Rate Paid on Swap	the Company pays fixed rates between 4.34 percent and 6.435 percent
Derivative, Description of Variable Rate Basis	three-month or six-month USD London Interbank Offered Rate (LIBOR) on the notional values
Schedule Of Fair Values Of Fuel Derivatives Amounts Posted As Collateral And Collateral Posting Thresholds [Line Items]
Fair Value of fuel derivatives	(657)		(657)																																																																																																																											(256)		(228)		(95)		(50)		(23)		(5)	[5]
Cash collateral held from (by) CP	(458)		(458)																																																																																																																											(205)		(220)		(33)		0		0		0	[5]
Non-cash collateral pledged to CP																																																																																																																														0		0		0		0		0		0	[5]
Investment grade credit rating [Abstract]
Fair value of fuel derivative level at which cash is provided to CP																																																																																																																														0 to (300) or >(700)		0 to (125) or >(625)		>(50)		>(75)		>(50)
Fair value of fuel derivative level at which cash is received from CP																																																																																																																														>40		>150		>200	[6]	>125	[6]	>250
Fair value of fuel derivative level at which non-cash collateral is pledged to CP																																																																																																																														(300) to  (700)	[7]	(125) to  (625)	[7]	N/A		N/A		N/A
Non-investment grade credit rating [Abstract]
Fair value of fuel derivative level at which cash is provided to CP																																																																																																																														0 to (300) or >(700)		0 to (125) or >(625)			[8]		[8]		[8]
Fair value of fuel derivative level at which cash is received from CP																																																																																																																															[8]		[8]		[8]		[8]		[8]
Fair value of fuel derivative level at which non-cash collateral is pledged to CP																																																																																																																														(300) to  (700)		(125) to  (625)		N/A		N/A		N/A
Maximum Sum Of Derivatives Of Counterparty To Be Included In Other	15		15
Cash collateral deposits provided to counterparty under bilateral collateral provisions, Acquirer - current	64		64
Cash collateral deposits provided to counterparty under bilateral collateral provisions, Acquiree - current	$ 34		$ 34

[1] * Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note.

[2] Net of tax

[3] Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively.

[4] Amounts are included in Other (gains) losses, net.

[5] (a) Individual counterparties with fair value of fuel derivatives <$15 million.

[6] (c) Thresholds may vary based on changes in credit ratings within investment grade.

[7] (d) The Company has the option of providing cash or pledging aircraft as collateral. No aircraft were pledged as collateral as of September 30, 2011.

[8] (b) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts.

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NET INCOME PER SHARE (Tables)

0 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Schedule Of Earnings Per Share Basic And Diluted Table Text Block

			Three months ended				Nine months ended
			September 30,				September 30,
				2011		2010		2011		2010
NUMERATOR:
	Net income (loss)		$	(140)	$	205	$	26	$	328
DENOMINATOR:
	Weighted average shares
		outstanding, basic		792		746		773		745
	Dilutive effect of Employee stock
		awards		-		1		1		1
	Adjusted weighted-average shares
		outstanding, diluted		792		747		774		746
NET INCOME (LOSS) PER SHARE:
	Basic		$	(0.18)	$	0.27	$	0.03	$	0.44
	Diluted		$	(0.18)	$	0.27	$	0.03	$	0.44
Antidilutive stock options
	excluded from calculations			48		64		48		70

XML

NET INCOME PER SHARE

0 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

NET INCOME PER SHARE

4.NETINCOME (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted net income (loss) per share (in millions except per share amounts):

			Three months ended				Nine months ended
			September 30,				September 30,
				2011		2010		2011		2010
NUMERATOR:
	Net income (loss)		$	(140)	$	205	$	26	$	328
DENOMINATOR:
	Weighted average shares
		outstanding, basic		792		746		773		745
	Dilutive effect of Employee stock
		awards		-		1		1		1
	Adjusted weighted-average shares
		outstanding, diluted		792		747		774		746
NET INCOME (LOSS) PER SHARE:
	Basic		$	(0.18)	$	0.27	$	0.03	$	0.44
	Diluted		$	(0.18)	$	0.27	$	0.03	$	0.44
Antidilutive stock options
	excluded from calculations			48		64		48		70

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FAIR VALUE MEASUREMENTS

0 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

FAIR VALUE MEASUREMENTS

10.       FAIR VALUE MEASUREMENTS

Accounting standards pertaining to fair value measurements establish a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of September 30,2011, the Company held certain items that are required to be measured at fair value on a recurring basis. These included cash equivalents,short-term investments (primarily treasury bills, commercial paper, and certificates of deposit), certain noncurrent investments, interest rate derivative contracts, fuel derivative contracts, and available-for-sale securities. The majority of the Company's short-term investments consist of instruments classified as Level 1. However, the Company has certificates of deposit and commercial paper that are classified as Level 2, due to the fact that the fair value for these instruments is determined utilizing observable inputs in non-active markets. Noncurrent investments consist of certain auction rate securities, primarily those collateralized by student loan portfolios, which are guaranteed by the U.S. Government. Other available-for-sale securities primarily consist of investments associated with the Company's excess benefit plan.

The Company's fuel and interest rate derivative instruments consist of over-the-counter (OTC) contracts, which are not traded on a public exchange. Fuel derivative instruments include swaps, as well as different types of option contracts, whereas interest rate derivatives consistsolely of swap agreements. See Note 5 for further information on the Company's derivative instruments and hedging activities. The fair values of swap contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, the Company has categorized these swap contracts as Level 2. The Company determines the value of option contracts utilizing a standard option pricing model based on inputs that are either readily available in public markets, can be derived from information available in publicly quoted markets, or are quoted by financial institutions that trade these contracts. Because certain of the inputs used to determine the fair value of option contracts are unobservable (principally implied volatility), the Company has categorized these option contracts as Level 3. The fair value of option contracts considers both the intrinsic value and any remaining time value associated with those derivatives that have not yet settled. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of derivative contracts it holds.

The Company's investments associated with its excess benefit plan consist of mutual funds that are publicly traded and for which market prices are readily available. This plan is a deferred compensation plan designed to hold Employee contributions in excess of limits established by Section 415 of the Internal Revenue Code. This plan is funded through qualifying Employee contributions, and it impacts the Company's earnings through changes in the fair value of plan assets.

All of the Company's auction rate security instruments, totaling $81million atSeptember 30,2011, are classified as available-for-sale securities and are reflected at estimated fair value in the unaudited Condensed Consolidated Balance Sheet. In periods when an auction process successfully took place every 30-35 days, quoted market prices would be readily available, which would qualify the securities as Level 1. However, due to events in credit markets beginning during first quarter 2008, the auction events for these remaining instruments failed, and have continued to fail through the current period. Therefore, the Company determines the estimated fair values of these securities utilizing a discounted cash flow analysis or other type of valuation model. The Company has performed, and routinely updates, a valuation for each of its auction rate security instruments,considering, among other items, the collateralization underlying the security investments, the expected future cash flows, including the final maturity, associated with the securities, and estimates of the next time the security is expected to have a successful auction or return to full par value.

In association with its estimate of fair value related to auction rate security instruments as of September 30, 2011, the Company has recorded a temporary unrealized decline in fair value of $15 million, with an offsetting entry to AOCI. The Company continues to believe that this decline in fair value is due entirely to market liquidity issues, because the underlying assets for the majority of these auction rate securities held by the Company are currently rated investment grade by Moody's, Standard and Poor's, and Fitch and are almost entirely backed by the U.S. Government. The range of maturities for the Company's auction rate securities are from 7 years to 36 years. Considering the relative insignificance of these securities in comparison to the Company's liquid assets and other sources of liquidity, the Company has no current intention of selling these securities nor does it expect to be required to sell these securities before a recovery in their cost basis. At the time of the first failed auctions during first quarter 2008, the Company held a total of $463 million in auction rate securities and, since that time, has been able to sell $367 million of these instruments at par value.

The Company remains in discussions with its remaining counterparties to determine whether mutually agreeable decisions can be reached regarding the effective repurchase of its remaining auction rate securities. The Company continues to earn interest on its outstanding auction rate security instruments. Any future fluctuation in fair value related to these instruments that the Company deems to be temporary, including any recoveries of previous temporary write-downs, would be recorded to AOCI. If the Company determines that any future valuation adjustment is other than temporary, it will record a charge to earnings as appropriate.

The following tables present the Company's assets and liabilities that are measured at fair value on a recurring basis at September 30, 2011 and December 31, 2010:

					Fair value measurements at reporting date using
				Quoted prices in active markets for identical assets			Significant other observable inputs		Significant unobservable inputs
Description		September 30, 2011			(Level 1)		(Level 2)		(Level 3)
Assets		(in millions)
Cash equivalents
	Cash equivalents (a)	$	891		$	891	$	-	$	-
	Commercial paper		117			-		117		-
	Certificates of deposit		8			-		8		-
Short-term investments:
	Treasury bills		2,354			2,354		-		-
	Certificates of deposit		226			-		226		-
	Commercial paper		60			-		60		-
Noncurrent investments (b)
	Auction rate securities		81			-		-		81
	Certificates of deposit		25			-		25		-
Interest rate derivatives (see Note 5)			64			-		64		-
Fuel derivatives:
	Swap contracts (c)		216			-		216		-
	Option contracts (c)		582			-		-		582
Other available-for-sale securities			5			-		-		5
Total assets		$	4,629		$	3,245	$	716	$	668
Liabilities
Fuel derivatives:
	Swap contracts (c)	$	(440)		$	-	$	(440)	$	-
	Option contracts (c)		(1,015)			-		-		(1,015)
Interest rate derivatives (see Note 5)			(130)			-		(130)		-
Total liabilities		$	(1,585)		$	-	$	(570)	$	(1,015)
(a)	Cash equivalents is primarily composed of money market investments.
(b)	Noncurrent investments are included in Other assets in the unaudited Condensed Consolidated Balance Sheet.
(c)	In the unaudited Condensed Consolidated Balance Sheet, amounts are presented as a net liability, and are also net of cash collateral provided to counterparties. See Note 5.
(d)	In the unaudited Condensed Consolidated Balance Sheet, amounts are presented as a net asset, and are also net of cash collateral received from or provided to counterparties. See Note 5.

				Fair value measurements at reporting date using
				Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
Description		December 31, 2010		(Level 1)		(Level 2)			(Level 3)
Assets		(in millions)
Cash equivalents		$	1,261	$	1,261	$	-	$	-
Short-term investments:
	Treasury bills		2,010		2,010		-		-
	Certificates of deposit		267		-		267		-
Noncurrent investments (a)			93		-		-		93
Interest rate derivatives			73		-		73		-
Fuel derivatives:
	Swap contracts (b)		33		-		33		-
	Option contracts(b)		233		-		-		233
	Swap contracts (c)		286		-		286		-
	Option contracts(c)		788		-		-		788
Other available-for-sale securities			39		34		-		5
Total assets		$	5,083	$	3,305	$	659	$	1,119
Liabilities
Fuel derivatives:
	Swap contracts (b)	$	(387)	$	-	$	(387)	$	-
	Option contracts(b)		(119)		-		-		(119)
	Swap contracts (c)		(476)		-		(476)		-
	Option contracts(c)		(216)		-		-		(216)
Interest rate derivatives			(4)		-		(4)		-
Total liabilities		$	(1,202)	$	-	$	(867)	$	(335)
(a)	Auction rate securities included in Other assets in the unaudited Condensed Consolidated Balance Sheet.
(b)	In the unaudited Condensed Consolidated Balance Sheet, amounts are presented as a net liability, and are also net of cash collateral provided to counterparties. See Note 5.
(c)	In the unaudited Condensed Consolidated Balance Sheet, amounts are presented as a net asset, and are also net of cash collateral received from counterparties. See Note 5.

The Company had no transfers of assets or liabilities between any of the above levels during thenine monthsendedSeptember 30,2011. The following tables present the Company's activity for items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three andnine monthsendedSeptember 30,2011:

		Fair value measurements using significant
		unobservable inputs (Level 3)
		Fuel		Auction rate			Other
(in millions)		derivatives		securities			securities		Total
Balance at June 30, 2011		$	846	$	84		$	5	$	935
Total gains or (losses) (realized or unrealized)
	Included in earnings		(635)		-			-		(635)
	Included in other comprehensive income		(624)		(3)			-		(627)
Purchases			105		-			-		105
Sales			(93)		-			-		(93)
Settlements			(32)		-			-		(32)
Balance at September 30, 2011		$	(433)	$	81	(a)	$	5	$	(347)
The amount of total gains or (losses) for the
	period included in earnings attributable to the
	change in unrealized gains or losses relating to
	assets still held at September 30, 2011	$	(614)	$	-		$	-	$	(614)
(a) Included in Other assets in the unaudited Condensed Consolidated Balance Sheet.

		Fair value measurements using significant
		unobservable inputs (Level 3)
		Fuel		Auction rate			Other
(in millions)		derivatives		securities			securities		Total
Balance at December 31, 2010		$	686	$	93		$	5	$	784
Total gains or (losses) (realized or unrealized)
	Included in earnings		(438)		-			-		(438)
	Included in other comprehensive income		(439)		2			-		(437)
Purchases			425		-			-		425
Sales			(499)		(14)			-		(513)
Settlements			(168)		-			-		(168)
Balance at September 30, 2011		$	(433)	$	81	(a)	$	5	$	(347)
The amount of total gains or (losses) for the
	period included in earnings attributable to the
	change in unrealized gains or losses relating to
	assets still held at September 30, 2011	$	(405)	$	-		$	-	$	(405)
(a) Included in Other assets in the unaudited Condensed Consolidated Balance Sheet.

All settlements from fuel derivative contracts that are deemed “effective” are included in Fuel and oil expense in the period the underlying fuel is consumed in operations. Any “ineffectiveness” associated with hedges, including amounts that settled in the current period (realized), and amounts that will settle in future periods (unrealized), is recorded in earnings immediately, as a component of Other (gains) losses, net. See Note 5 for further information on hedging. Any gains and losses (realized and unrealized) related to other investments are reported in Other operating expenses, and were immaterial for thethree and nine monthsendedSeptember 30, 2011 and 2010.

The carrying amounts and estimated fair values of the Company's(including AirTran) long-term debt (including current maturities) atSeptember 30,2011, are contained in the below table. The estimated fair values of publicly held long-term debt were based on quoted market prices.

	Carrying		Estimated fair
(In millions)	value		value
10.5% Notes due 2011	$	399	$	391
French credit agreements due 2012		10		10
6.5% Notes due 2012		379		385
5.25% Notes due 2014		350		367
5.75% Notes due 2016		271		298
5.25% Convertible senior notes due 2016		120		114
5.125% Notes due 2017		300		322
French credit agreements due 2018		69		69
Fixed-rate B717 aircraft notes payable through 2017 - 10.43%		68		73
Fixed-rate B737 aircraft notes payable through 2018 - 7.02%		41		44
Term loan agreement due 2019 - 6.64%		276		282
Term loan agreement due 2019 - 6.84%		105		114
Term loan agreement due 2020 - 5.223%		496		447
Floating rate B737 aircraft notes payable through 2020 - 1.91%		634		634
Pass through certificates due 2022		411		420
7.375% Debentures due 2027		64		81

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COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

9 Months Ended

Sep. 30, 2011

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Components of comprehensive income

The differences between Net income (loss) and Comprehensive income (loss) for the three andnine months endedSeptember 30,2011 and 2010, were as follows:

			Three months ended September 30,
(In millions)			2011		2010
Net income (loss)			$	(140)	$	205
	Unrealized gain (loss) on fuel derivative instruments,
		net of deferred taxes of ($233) and $124		(372)		199
	Unrealized gain (loss) on interest rate swaps,
		net of deferred taxes of ($19) and ($7)		(30)		(12)
	Other, net of deferred taxes of ($3) and $1			(4)		1
	Total other comprehensive income (loss)			(406)		188
Comprehensive income (loss)			$	(546)	$	393

			Nine months ended September 30,
(In millions)			2011		2010
Net income			$	26	$	328
	Unrealized gain (loss) on fuel derivative instruments,
		net of deferred taxes of ($137) and $100		(219)		160
	Unrealized gain (loss) on interest rate swaps,
		net of deferred taxes of ($22) and ($21)		(34)		(34)
	Other, net of deferred taxes of $1 and $0			2		(1)
	Total other comprehensive income (loss)			(251)		125
Comprehensive income (loss)			$	(225)	$	453

Rollforward of the Amounts Included in AOCI, net of taxes

		Fuel		Interest				Accumulated other
		hedge		rate				comprehensive
(In millions)		derivatives		derivatives		Other		income (loss)
Balance at June 30, 2011		$	(97)	$	(38)	$	28	$	(107)
	Changes in fair value		(417)		(30)		(4)		(451)
	Reclassification to earnings		45		-		-		45
Balance at September 30, 2011		$	(469)	$	(68)	$	24	$	(513)

		Fuel		Interest				Accumulated other
		hedge		rate				comprehensive
(In millions)		derivatives		derivatives		Other		income (loss)
Balance at December 31, 2010		$	(250)	$	(34)	$	22	$	(262)
	Changes in fair value		(297)		(34)		2		(329)
	Reclassification to earnings		78		-		-		78
Balance at September 30, 2011		$	(469)	$	(68)	$	24	$	(513)

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FINANCIAL DERIVATIVE INSTRUMENTS (Policy)

3 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Derivatives, Policy

Upon proper qualification, the Company accounts for its fuel derivative instruments as cash flow hedges. All derivatives designated as hedges that meet certain requirements are granted hedge accounting treatment. Generally, utilizing hedge accounting, all periodic changes in fair value of the derivatives designated as hedges that are considered to be effective are recorded in Accumulated other comprehensive income (loss) (“AOCI”) until the underlying jet fuel is consumed. See Note 6. The Company's results are subject to the possibility that periodic changes will not be effective, as defined, or that the derivatives will no longer qualify for hedge accounting. Ineffectiveness results when the change in the fair value of the derivative instrument exceeds the change in the value of the Company's expected future cash outlay to purchase and consume jet fuel. To the extent that the periodic changes in the fair value of the derivatives are ineffective, the ineffective portion is recorded to Other (gains) losses, net in the statement of operations. Likewise, if a hedge ceases to qualify for hedge accounting, any change in the fair value of derivative instruments since the last period is recorded to Other (gains) losses, net in the statement of operations in the period of the change; however, any amounts previously recorded to AOCI would remain there until such time as the original forecasted transaction occurs, at which time these amounts would be reclassified to Fuel and oil expense. When the Company has sold derivative positions in order to effectively “close” or offset a derivative already held as part of its fuel derivative instrument portfolio, any subsequent changes in fair value of those positions are marked to market through earnings. Likewise, any changes in fair value of those positions that were offset by entering into the sold positions are concurrently marked to market through earnings. However, any changes in value related to hedges that were deferred as part of AOCI while designated as a hedge would remain until the originally forecasted transaction occurs. In a situation where it becomes probable that a hedged forecasted transaction will not occur, any gains and/or losses that have been recorded to AOCI would be required to be immediately reclassified into earnings. The Company did not have any such situations occur during 2010or during the nine months ended September 30, 2011.

Ineffectiveness is inherent in hedging jet fuel with derivative positions based in other crude oil related commodities. Due to the volatility in markets for crude oil and related products, the Company is unable to predict the amount of ineffectiveness each period, including the loss of hedge accounting, which could be determined on a derivative by derivative basis or in the aggregate for a specific commodity. This may result, and has resulted, in increased volatility in the Company's financial results. However, even though derivatives may not qualify for hedge accounting, the Company continues to hold the instruments as management believes derivative instruments continue to afford the Company the opportunity to stabilize jet fuel costs.

Accounting pronouncements pertaining to derivative instruments and hedging are complex with stringent requirements, including the documentation of a Company hedging strategy, statistical analysis to qualify a commodity for hedge accounting both on a historical and a prospective basis, and strict contemporaneous documentation that is required at the time each hedge is designated by the Company. As required, the Company assesses the effectiveness of each of its individual hedges on a quarterly basis. The Company also examines the effectiveness of its entire hedging program on a quarterly basis utilizing statistical analysis. This analysis involves utilizing regression and other statistical analyses that compare changes in the price of jet fuel to changes in the prices of the commodities used for hedging purposes.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

COMMITMENTS AND CONTINGENCIES

9.COMMITMENTS AND CONTINGENCIES

The Company is from time to time subject to various legal proceedings and claims arising in the ordinary course of business, including, but not limited to, examinations by the IRS. The Company's management does not expect that the outcome in any of its currently ongoing legal proceedings or the outcome of any adjustments presented by the IRS, individually or collectively, will have a material adverse effect on the Company's financial condition, results of operations, or cash flow.

During 2008, the City of Dallas approved the Love Field Modernization Program (“LFMP”), a project to reconstruct Dallas Love Field (“Airport”) with modern, convenient air travel facilities. Pursuant to a Program Development Agreement (“PDA”) with the City of Dallas, and the Love Field Airport Modernization Corporation (or “LFAMC,”a Texas non-profit “local government corporation” established by the City to act on the City's behalf to facilitate the development of the LFMP), the Company is managing this project. Major construction commenced during 2010, with completion of the project scheduled for the second half of 2014. Although subject to change, at the current time the project is expected to include the renovation of the Airport airline terminals and complete replacement of gate facilities with a new 20-gate facility, including infrastructure, systems and equipment, aircraft parking apron, fueling system, roadways and terminal curbside, baggage handling systems, passenger loading bridges and support systems, and other supporting infrastructure.

It is currently expected that the total amount spent on the LFMP project will be approximately $519 million. Although the City of Dallas has received commitments from various sources that are expected to fund portions of the LFMP project, including the Federal Aviation Administration, the Transportation Security Administration, and the City's Aviation Fund, the majority of the funds used are expected to be from the issuance of bonds. During fourth quarter 2010, $310 million of such bonds were issued by the LFAMC, and the Company has guaranteed principal and interest payments on the bonds.Depending on funding needs and the timing of these funds from other sources, an additional tranche of bonds will likely be issued prior to the completion of the LFMP project.

The Company has agreed to manage the majority of the LFMP project, and as a result, has evaluated its ongoing accounting requirements in consideration of accounting guidance provided for lessees involved in asset construction. The Company has recorded and will continue to record an asset and corresponding obligation for the cost of the LFMP project as the construction of the facility occurs. As ofSeptember 30,2011, the Company had recorded construction cost incurred of $152million as both an asset as a component of Ground property and equipment and a corresponding liability as a component of Other non-current liabilities, respectively, in its unaudited Condensed Consolidated Balance Sheet. Upon completion of the LFMP project, it is expected the Company would begin depreciating the assets over their estimated useful lives, and would reduce the corresponding liabilities primarily through the Company's airport rental payments to the City of Dallas.

Unsecured Revolving Credit Facility

On April 28, 2011, the Company entered into a new $800 million unsecured revolving credit facility expiring in April 2016 and terminated its previous facility, which would have expired in October 2012, as well as AirTran's previous facility.  Other than an increased borrowing capacity, the Company's new facility is substantially the same as the previous facility. At the Company's option, interest on the new facility can be calculated on one of several different bases.  The new facility also contains a financial covenant requiring a minimum coverage ratio of adjusted pre-tax income to fixed obligations, as defined.  As of September 30,2011, the Company was in compliance with this covenant and there were no amounts outstanding under the revolving credit facility.

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ACQUISITION AND RELATED MATTERS

0 Months Ended

3 Months Ended

Sep. 30, 2011

Sep. 30, 2011

Notes to Financial Statements [Abstract]

ACQUISITION AND RELATED MATTERS

2. AIRTRAN ACQUISITION AND RELATED MATTERS

AirTran Holdings, Inc.

On May 2, 2011(the “acquisition date”), the Company acquired all of the outstanding equity of AirTran Holdings, Inc. (“AirTran Holdings”), the former parent company of AirTran Airways, Inc. (“AirTran Airways”), in exchange for Southwest Airlines Co. (“Southwest Airlines”) common stock and cash. Throughout this Form 10-Q, the Company makes reference to AirTran, which is meant to be inclusive of the following: (i) for periods prior to the acquisition date, AirTran Holdings and its subsidiaries, including, among others, AirTran Airways; and (ii) for periods on and after the acquisition date, AirTran Holdings, LLC, the successor to AirTran Holdings, and its subsidiaries, including among others, AirTran Airways.AirTran Airways offers scheduled airline services, using Boeing 717-200 aircraft (B717) and Boeing 737-700 aircraft (B737), throughout the United States and to select international locations. Approximately half of AirTran Airways'flights originate or terminate at its largest hub in Atlanta, Georgia. AirTran Airways also serves a number of markets with non-stop service from smaller hubs in Baltimore, Maryland; Milwaukee, Wisconsin; and Orlando, Florida. The Company believes the acquisition of AirTran positions it to respond better to the economic and competitive challenges of the industry because, among other reasons: (i) it allows the Company to offer more low-fare destinations by extending its network and diversifying into new markets, including significant opportunities to and from Atlanta, the busiest airport in the United States and the largest domestic market the Company previously did not serve, (ii) it expands the Company's presence in slot-controlled markets (New York LaGuardia/Ronald Reagan Washington National Airport), and (iii) it provides access to near-international leisure markets in the Caribbean and Mexico.

The accompanying unaudited Condensed Consolidated Financial Statements include the results of operations and cash flows for AirTran from May 2, 2011 through September 30, 2011. AirTran will not be considered a separate segment for financial reporting purposes. In addition, as a result of the manner in which the acquisition and related transactions were structured, AirTran's public debt is now a direct obligation of Southwest Airlines, which eliminates the subsequent need for reporting of stand-alone AirTran financial results.  For the three and nine months endedSeptember 30,2011, total operating revenues of $758 millionand $1.3 billion and net income of $3 million and net loss of $24 million, respectively, are attributable to AirTran and areincluded in the Company's unaudited Condensed Consolidated Statement of Operations.

Equity transaction

Each share of AirTran Holdings common stock was exchanged for $3.75in cash and 0.321shares of Southwest Airlines common stock. The common stock consideration was based on the average of the Southwest Airlines closing common stock price for the 20 trading days ending April 27, 2011, which was $11.90. The transaction valued AirTran Holdings common stock at approximately $7.57per share, or $1.0billion in the aggregate. Stockholders of AirTran Holdings,including those holding restricted stock awards, received approximately 44 million shares of Southwest Airlines common stock, which represented approximately 5.6percent of the Southwest Airlines common shares outstanding. Additionally, holders of AirTran Holdingsequity received cash of $518 million, including $7 million in cash for the fair value of AirTran stock options and performance share units. Including AirTran debtoutstanding at the acquisition date (including convertible notes outstanding at the acquisition date) and capitalized aircraft operating leases, the total transaction value was approximately $3.2billion. Subsequent to the acquisition date, a portion of the convertible notes previously held by AirTran note holders were either converted or called by the Company for an aggregate of approximately seven million shares of Southwest Airlines common stock and $81 million in cash.The equity transaction did not contain any contingent consideration arrangements.

Expenses related to the AirTran acquisition

The Company is expected to continue to incur substantial integration and transition expenses in connection with the AirTran acquisition, including the necessary costs associated with integrating the operations of the two companies. While the Company has assumed that a certain level of expenses will be incurred, there are many factors that could affect the total amount or the timing of these expenses, and many of the expenses that will be incurred are, by their nature, difficult to estimate. These expenses could, particularly in the near term, exceed the financial benefits that the Company expects to achieve from the AirTran acquisition and could continue to result in the Company taking significant charges against earnings. For the three and nine month periods ended September 30,2011, the Company incurred consolidated acquisition-related costs of $22 million and $97 million, respectively, primarily consisting of financial advisory fees and consulting, severance, and technology costs. In the Company's unaudited Condensed Consolidated Statement of Operations, these costs are classified as Acquisition and integration expenses.

Tax matters

AirTran experienced an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as amended, as a result of the acquisition. Section 382 of the Code imposes an annual limitation on the amount of taxable income generated subsequent to the ownership change that may be offset with Federal net operating loss carryforwards (“NOLs”) of the corporation incurred before the ownership change. Any unused annual limitation may, subject to certain limits, be carried over to later years, and the limitation may, under certain circumstances, be increased by built-in gains or reduced by built-in losses in the assets held by such corporation at the time of the ownership change. The combined company's use of NOLs arising after the date of an ownership change would not be limited unless the combined company were to experience a subsequent ownership change. As of the acquisition date, AirTran had NOLs of $542 million, which expire between 2017 and 2029, available to offset future taxable income, resulting in a deferred tax asset of $190 million, which represents the expected tax benefit of the NOLs. No valuation allowance was necessary.The Company currently expects that the ownership change resulting from the AirTran acquisition will not significantly limit its ability to use AirTran's NOL and alternative minimum tax credit carryforwards in the carryforward period.

Recording of assets acquired and liabilities assumed

The transaction has been accounted for using the acquisition method of accounting (“purchase accounting”), which requires, among other things, that most assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. No material assets or liabilities arose from contingencies recognized at the acquisition date. Certain estimated values are not yet finalized (see below) and are subject to change. Fair value adjustments made during the third quarter of 2011 primarily included a $13 million increase in the value assigned to the deferred tax asset, a $7 million reduction in the value assigned to the customer relationship intangible, and the related impact on goodwill. The Company will finalize the amounts recognized as it obtains the information necessary to complete the analyses. The Company expects to finalize these amounts prior to December 31, 2011. The following table summarizes the assets acquired and liabilities assumed as of the acquisition date at estimated fair value:

(in millions)		May 2, 2011
Assets
	Cash and cash equivalents	$	477
	Restricted cash		6
	Other current assets		234
	Operating property and equipment		1,151
	Goodwill		970
	Other identified intangibles		125
	Deferred income taxes		163
	Other noncurrent assets		45
Liabilities
	Long-term debt and capital leases, including current portion		(1,119)
	Air traffic liability		(354)
	Other liabilities assumed		(657)
Net assets acquired		$	1,041

		Estimated
		fair value of	Weighted-average		Accumulated
		asset/(liability)	useful life		amortization
		(in millions)	(in years)		(in millions)
Customer relationships/marketing agreements	$	39	4	$	8
Trademarks/trade names		36	3		5
Domestic Slots		43	24		1
Internally developed software		2	2		1
Noncompete agreements		5	2		1
Total	$	125	10	$	16

Leasehold Interest

Lease fair value adjustments for operating leases were created as a result of the acquisition of AirTran. The fair value adjustments represent the net present value of the differences between contractual lease rates and the estimated fair market lease rates for similar leased assets at the acquisition date. An asset (liability) results when the contractual lease rates are more (less) favorable than market lease terms at the valuation date.As ofSeptember 30,2011, the lease fair value adjustments are classified within Other assets and Other non-current liabilitiesin the amounts of $2 million and $376 million, respectively. The lease fair value adjustments are amortized on a straight-line basis to aircraft rentalsover the individual applicable remaining lease terms. The aggregate amortization income (reduction of expense) for the three and nine months ended September 30, 2011, was $10 million and $16 million, respectively. Estimated aggregate amortization income (reduction of expense) for the remainder of 2011 and the five succeeding years and thereafter is as follows: 2011 - $10 million, 2012 - $39 million, 2013 - $39 million, 2014 - $39 million, 2015 - $39 million, 2016 - $39 million, 2017 and thereafter - $155 million.The weighted-average useful life for the leasehold interest asset is 9 years and for the leasehold interest liability is 10 years, for a total weighted-average leasehold useful life of 10 years.

Goodwill

Goodwill in the amount of $970 millionhas been recorded for the acquisition of AirTran. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Goodwill will not be amortized, but will be tested for impairment at least annually. None of the goodwill is deductible for tax purposes. Specifically, the goodwill recorded as part of the acquisition of AirTran includes:

• The synergies and other benefits that are expected to result from combining the operations of AirTran with the operations of the Company; and
• Any intangible assets that do not qualify for separate recognition, such as the AirTran trained and assembled workforce.

  The recorded amounts for assets and liabilities are provisional and subject to change. However, the Company does not expect that any future adjustments will be material. The following are the more significant items thatare subject to change:

• The fair value of specific executory contracts,and deferred income taxes and liabilities, pending finalization of valuation efforts; and
• The purchase price allocable to goodwill, as a result of changes to the aforementioned items.

A single estimate of fair value results from a complex series of judgments about future events and uncertainties and relies heavily on estimates and assumptions. The Company's judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact its results of operations.

Pro forma impact of the acquisition

The unaudited pro forma results presented below include the effects of the AirTran acquisition as if it had been consummated as of January 1, 2010. The pro forma results include the amortization associated with estimates (certain of which are preliminary) for the acquired intangible assets, fair value adjustments for deferred revenue, favorable/unfavorable leasehold interests, property and equipment, and long-term debt. In addition, the pro forma results do not include any anticipated synergies, or the assumption of hedge accounting for AirTran's derivative instruments, or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 1, 2010.

		Three months ended				Nine months ended
		September 30,				September 30,
(In millions, except per share data)		2011		2010		2011		2010
Total operating revenues	$	4,312	$	3,860	$	12,495	$	10,961
Net income		(157)		231		7		345
Net income per share, basic		(0.20)		0.29		0.01		0.44
Net income per share, diluted		(0.20)		0.29		0.01		0.44

The fair values of the assets acquired and liabilities assumed were determined using the market, income, and cost approaches. The market approach, which indicates value for a subject asset based on available market pricing for comparable assets, was utilized to estimate the fair value of AirTran's aircraft and operating leases. The market approach used by the Company included prices and other relevant information generated by market transactions involving comparable assets, as well as industry pricing guides and other sources. The Company considered the current market for the aircraft, the maintenance condition of the aircraft and the expected proceeds from the sale of the assets, among other factors.The fair value of AirTran's frequent flyer program liability was estimated based on the weighted average equivalent ticket value of outstanding frequent flyer credits that were expected to be redeemed as of May 2, 2011. The income approach was primarily used to value intangible assets, including customer relationships and marketing agreements, noncompete agreements with certain AirTran executives, the AirTran trademark and trade name, and certain domestic airport take-off and landing slots. The income approach indicates value for a subject asset based on the present value of cash flows projected to be generated by the asset. Projected cash flows are discounted at a required market rate of return that reflects the relative risk of achieving the cash flows and the time value of money. The cost approach, which estimates value by determining the current cost of replacing an asset with another of equivalent economic utility, was used, as appropriate, for certain assets for which the market and income approaches could not be applied due to the nature of the asset. The cost to replace a given asset reflects the estimated reproduction or replacement cost for the asset, less an allowance for loss in value due to depreciation.

Intangible assets

Identifiable intangibles were created as a result of the acquisition of AirTran, which will be amortized as follows:

• Customer Relationships: Amortized based on an accelerated amortization schedule to reflect the estimated free cash flows the customer relationships are expected to provide.
• Trademarks/Tradenames: Amortized based on an accelerated amortization schedule to reflect the estimated free cash flows the assets are expected to provide.
• Domestic Slots: Straight-line amortization for owned slots based on the applicable estimated useful life. Straight-line amortization for leased slotsover the applicable lease term.
• Internally developed software: Straight-line amortization over the expected useful life of the software.
• Non-compete agreements: Straight-line amortization over the expected useful life of the applicable contract.

The identifiable intangibles created as a result of the acquisition have been amortized from the acquisition date. The aggregate amortization expense for the three and nine months ended September 30, 2011, was $9 million and $16 million, respectively. Estimated aggregate amortization expensefor the remainder of 2011 and the five succeeding years and thereafter is as follows: 2011 – $9 million, 2012 – $20 million, 2013 – $15 million, 2014 – $11 million, 2015 – $9 million, 2016 – $7 million, 2017 and thereafter- $38 million. The following table is a summary of the acquisition date fair value estimates of the acquired identifiable intangible assets, weighted-average useful lives, and balance of accumulated amortization as ofSeptember 30,2011:

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FINANCIAL DERIVATIVE INSTRUMENTS

0 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

FINANCIAL DERIVATIVE INSTRUMENTS

5.FINANCIAL DERIVATIVE INSTRUMENTS

Fuel contracts

Airline operators are inherently dependent upon energy to operate and, therefore, are impacted by changes in jet fuel prices. Furthermore, jet fuel and oil typically represent one of the largest operating expenses for airlines. The Company endeavors to acquire jet fuel at the lowest possible cost and to reduce volatility in operating expenses through its fuel hedging program. Because jet fuel is not widely traded on an organized futures exchange, there are limited opportunities to hedge directly in jet fuel. However, the Company has found that financial derivative instruments in other commodities, such as West Texas Intermediate crude oil (“WTI”), Brent crude oil (“Brent”), and refined products, such as heating oil and unleaded gasoline, can be useful in decreasing its exposure to jet fuel price volatility. The Company does not purchase or hold any financial derivative instruments for trading purposes.

The Company has used financial derivative instruments for both short-term and long-term time frames, and primarily uses a mixture of purchased call options, collar structures (which include both a purchased call option and a sold put option), call spreads (which include a purchased call option and a sold call option), and fixed price swap agreements in its portfolio.

The Company evaluates its hedge volumes strictly from an “economic” standpoint and thus does not consider whether the hedges have qualified or will qualify for hedge accounting. The Company defines its “economic” hedge as the net volume of fuel derivative contracts held, including the impact of positions that have been offset through sold positions, regardless of whether those contracts qualify for hedge accounting. For third quarter2011, the Company had fuel derivatives in place related to approximately 39 percent of its fuel consumption. As of September 30,2011, the Company had fuel derivative instruments in place to provide coverage on a portion of its remaining 2011 estimated fuel consumption at varying WTI price levels.The following table provides information about the Company's (inclusive of fuel derivative instruments acquired from Air Tran – See Note 2) volume of fuel hedging for the remainder of 2011, as well as the years 2012through 2015.

	Fuel hedged as of
	September 30, 2011
Period (by year)	(gallons in millions)
Fourth quarter 2011	177
2012	1,341
2013	969
2014	777
2015	357

Upon proper qualification, the Company accounts for its fuel derivative instruments as cash flow hedges. All derivatives designated as hedges that meet certain requirements are granted hedge accounting treatment. Generally, utilizing hedge accounting, all periodic changes in fair value of the derivatives designated as hedges that are considered to be effective are recorded in Accumulated other comprehensive income (loss) (“AOCI”) until the underlying jet fuel is consumed. See Note 6. The Company's results are subject to the possibility that periodic changes will not be effective, as defined, or that the derivatives will no longer qualify for hedge accounting. Ineffectiveness results when the change in the fair value of the derivative instrument exceeds the change in the value of the Company's expected future cash outlay to purchase and consume jet fuel. To the extent that the periodic changes in the fair value of the derivatives are ineffective, the ineffective portion is recorded to Other (gains) losses, net in the statement of operations. Likewise, if a hedge ceases to qualify for hedge accounting, any change in the fair value of derivative instruments since the last period is recorded to Other (gains) losses, net in the statement of operations in the period of the change; however, any amounts previously recorded to AOCI would remain there until such time as the original forecasted transaction occurs, at which time these amounts would be reclassified to Fuel and oil expense. When the Company has sold derivative positions in order to effectively “close” or offset a derivative already held as part of its fuel derivative instrument portfolio, any subsequent changes in fair value of those positions are marked to market through earnings. Likewise, any changes in fair value of those positions that were offset by entering into the sold positions are concurrently marked to market through earnings. However, any changes in value related to hedges that were deferred as part of AOCI while designated as a hedge would remain until the originally forecasted transaction occurs. In a situation where it becomes probable that a hedged forecasted transaction will not occur, any gains and/or losses that have been recorded to AOCI would be required to be immediately reclassified into earnings. The Company did not have any such situations occur during 2010or during the nine months ended September 30, 2011.

Ineffectiveness is inherent in hedging jet fuel with derivative positions based in other crude oil related commodities. Due to the volatility in markets for crude oil and related products, the Company is unable to predict the amount of ineffectiveness each period, including the loss of hedge accounting, which could be determined on a derivative by derivative basis or in the aggregate for a specific commodity. This may result, and has resulted, in increased volatility in the Company's financial results. However, even though derivatives may not qualify for hedge accounting, the Company continues to hold the instruments as management believes derivative instruments continue to afford the Company the opportunity to stabilize jet fuel costs.

Accounting pronouncements pertaining to derivative instruments and hedging are complex with stringent requirements, including the documentation of a Company hedging strategy, statistical analysis to qualify a commodity for hedge accounting both on a historical and a prospective basis, and strict contemporaneous documentation that is required at the time each hedge is designated by the Company. As required, the Company assesses the effectiveness of each of its individual hedges on a quarterly basis. The Company also examines the effectiveness of its entire hedging program on a quarterly basis utilizing statistical analysis. This analysis involves utilizing regression and other statistical analyses that compare changes in the price of jet fuel to changes in the prices of the commodities used for hedging purposes.

All cash flows associated with purchasing and selling fuel derivatives are classified as Other operating cash flows in the unaudited Condensed Consolidated Statement of Cash Flows. The following table presents the location of all assets and liabilities associated with the Company's hedging instruments within the unaudited Condensed Consolidated Balance Sheet:

			Asset derivatives				Liability derivatives
	Balance Sheet	Fair value at		Fair value at		Fair value at		Fair value at
(in millions)	location	9/30/2011		12/31/10		9/30/2011		12/31/10
Derivatives designated as hedges*
Fuel derivative contracts (gross)	Other current assets	$	-	$	151	$	-	$	16
Fuel derivative contracts (gross)	Other assets		-		547		-		88
Fuel derivative contracts (gross)	Accrued liabilities		71		122		138		18
Fuel derivative contracts (gross)	Other noncurrent liabilities		361		71		157		9
Interest rate derivative contracts	Other current assets		1		73		6		-
Interest rate derivative contracts	Other assets		63		-		-		-
Interest rate derivative contracts	Other noncurrent liabilities		-		-		136		4
Total derivatives designated as hedges		$	496	$	964	$	437	$	135
Derivatives not designated as hedges*
Fuel derivative contracts (gross)	Other current assets	$	-	$	164	$	-	$	284
Fuel derivative contracts (gross)	Other assets		-		212		-		304
Fuel derivative contracts (gross)	Accrued liabilities		257		40		525		222
Fuel derivative contracts (gross)	Other noncurrent liabilities		109		33		635		257
Total derivatives not designated as hedges		$	366	$	449	$	1,160	$	1,067
Total derivatives		$	862	$	1,413	$	1,597	$	1,202
* Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note.

In addition, the Company also had the following amounts associated with fuel derivative instruments and hedging activities in its unaudited Condensed Consolidated Balance Sheet:

		Balance Sheet	September 30,		December 31,
(in millions)		location	2011		2010
Cash collateral deposits provided		Offset against Other
	to counterparties - noncurrent	noncurrent liabilities	$	246	$	125
Cash collateral deposits provided		Offset against Accrued
	to counterparties - current	liabilities		212		-
Cash collateral deposits held from		Offset against Other
	counterparty - noncurrent	assets		-		60
Cash collateral deposits held from		Offset against Other
	counterparty - current	current assets		-		-
Due to third parties for settled fuel contracts		Accrued liabilities		10		-
Receivable from third parties for settled		Accounts and other
	fuel contracts	receivables		-		1
Net unrealized (gains) losses from fuel		Accumulated other
	hedges, net of tax	comprehensive (income) loss		469		250

The following tables present the impact of derivative instruments and their location within the unaudited Condensed Consolidated Statement of Operations for the three and ninemonths endedSeptember 30,2011 and 2010:

Derivatives in cash flow hedging relationships
		(Gain) loss							(Gain) loss					(Gain) loss
		recognized in AOCI on							reclassified from AOCI					recognized in income
		derivatives (effective							into income (effective					on derivatives
		portion)							portion)(a)						(ineffective portion) (b)
		Three months ended						Three months ended						Three months ended
		September 30,						September 30,						September 30,
(in millions)		2011			2010			2011			2010			2011		2010
Fuel derivative
	contracts	$	417	*	$	(122)	*	$	45	*	$	77	*	$	85	$	(24)
Interest rate
	derivatives		30	*		12	*		-			-			-		-
Total		$	447		$	(110)		$	45		$	77		$	85	$	(24)
*	Net of tax
(a)	Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively.
(b)	Amounts are included in Other (gains) losses, net.

Derivatives in cash flow hedging relationships
		(Gain) loss							(Gain) loss					(Gain) loss
		recognized in AOCI on							reclassified from AOCI					recognized in income
		derivatives (effective							into income (effective					on derivatives
		portion)							portion)(a)						(ineffective portion) (b)
		Nine months ended						Nine months ended						Nine months ended
		September 30,						September 30,						September 30,
(in millions)		2011			2010			2011			2010			2011		2010
Fuel derivative
	contracts	$	297	*	$	66	*	$	78	*	$	226	*	$	127	$	26
Interest rate
	derivatives		34	*		34	*		-			-			-		-
Total		$	331		$	100		$	78		$	226		$	127	$	26
*	Net of tax
(a)	Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively.
(b)	Amounts are included in Other (gains) losses, net.

Derivatives not in cash flow hedging relationships
	(Gain) loss
	recognized in income on
	derivatives
	Three months ended				Location of (gain) loss
	September 30,				recognized in income
(in millions)	2011		2010		on derivatives
Fuel derivative contracts	$	284	$	(26)	Other (gains) losses, net

Derivatives not in cash flow hedging relationships
	(Gain) loss
	recognized in income on
	derivatives
	Nine months ended				Location of (gain) loss
	September 30,				recognized in income
(in millions)	2011		2010		on derivatives
Fuel derivative contracts	$	129	$	13	Other (gains) losses, net

The Company also recorded expense associated with premiums paid for fuel derivative contracts that settled/expired during thethree months ended September 30,2011 and 2010 of $36 million and $37 million, respectively, and the nine months ended September 30,2011 and 2010 of $93million and $98 million, respectively. These amounts are excluded from the Company's measurement of effectiveness for related hedges and are included as a component of Other (gains) losses, net, in the unaudited Condensed Consolidated Statement of Operations.

The fair values of the derivative instruments, depending on the type of instrument, were determined by the use of present value methods or standard option value models with assumptions about commodity prices based on those observed in underlying markets. Included in the Company's cumulative net unrealized losses from fuel hedges as of September 30,2011, were approximately $228 million in unrealized losses, net of taxes, which are expected to be realized in earnings during the twelve months subsequent to September 30,2011. In addition, as of September 30,2011, the Company had already recognized cumulative net losses due to ineffectiveness and derivatives that do not qualify for hedge accounting treatment totaling $198 million, net of taxes. These net losses were recognized in third quarter2011 and prior periods, and are reflected in Retained earnings as of September 30,2011, but the underlying derivative instruments will not expire/settle until fourth quarter2011 or future periods.

Interest rate swaps

The Company is party to certain interest rate swap agreements that are accounted for as either fair value hedges or cash flow hedges, as defined in the applicable accounting guidance for derivative instruments and hedging. The interest rate swap agreements accounted for as fair value hedges qualify for the “shortcut” method of accounting for hedges, which dictates that the hedges are assumed to be perfectly effective, and, thus, there is no ineffectiveness to be recorded in earnings. For the Company's interest rate swap agreements accounted for as cash flow hedges, ineffectiveness is required to be measured at each reporting period.

AirTran has also entered into a number of interest rateswap agreements, which convert a portion of AirTran's floating-rate debt to a fixed-rate basis for the remaining life of the debt, thus reducing the impact of interest rate changes on future interest expense and cash flows. Under these agreements, which expire between 2016 and 2020, the Company pays fixed rates between 4.34 percent and 6.435 percentand receives either three-month or six-month USD London Interbank Offered Rate (LIBOR) on the notional values. The notional amount of outstanding debt related to interest rate swaps as of September 30,2011,was $451 million. These interest rate swap arrangements were designated as cash flow hedges as of the acquisition date. The ineffectiveness associated with all of the Company's interest rate cash flow hedges for all periods presented was not material.

Credit risk and collateral

Credit exposure related to fuel derivative instruments is represented by the fair value of contracts that are an asset to the Company at the reporting date. These outstanding instruments expose the Company to credit loss in the event of nonperformance by the counterparties to the agreements. However, the Company has not experienced any significant credit loss as a result of counterparty nonperformance in the past. To manage credit risk, the Company selects and periodically reviews counterparties based on credit ratings, limits its exposure to a single counterparty, and monitors the market position of the fuel hedging program and its relative market position with each counterparty. At September 30,2011, the Company had agreements with all of its active counterparties containing early termination rights and/or bilateral collateral provisions whereby security is required if market risk exposure exceeds a specified threshold amount or credit ratings fall below certain levels. The Company also had agreements with counterparties in which cash deposits and/or pledged aircraft are required to be posted whenever the net fair value of derivatives associated with those counterparties exceeds specific thresholds. The following table provides the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts as of September 30,2011, at which such postings are triggered:

Counterparty (CP)

A

B

C

D

E

Other(a)

Total

(in millions)

Fair value of fuel derivatives

$

(256)

$

(228)

$

(95)

$

(50)

$

(23)

$

(5)

$

(657)

Cash collateral held from (by) CP

(205)

(220)

(33)

-

-

-

(458)

If credit rating is investment

grade, fair value of fuel

derivative level at which:

Cash is provided to CP

0 to (300)

0 to (125)

>(50)

>(75)

>(50)

or >(700)

or >(625)

Cash is received from CP

>40

>150

>200(c)

>125(c)

>250

Aircraft or cash can be pledged to CP

(300) to

(125) to

N/A

N/A

N/A

(700)(d)

(625)(d)

If credit rating is non-investment

grade, fair value of fuel derivative

level at which:

Cash is provided to CP

0 to (300)

0 to (125)

(b)

(b)

(b)

or >(700)

or >(625)

Cash is received from CP

(b)

(b)

(b)

(b)

(b)

Aircraft can be pledged to CP

(300) to

(125) to

N/A

N/A

N/A

(700)

(625)

(a) Individual counterparties with fair value of fuel derivatives <$15 million.

(b) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts.

(c) Thresholds may vary based on changes in credit ratings within investment grade.

(d) The Company has the option of providing cash or pledging aircraft as collateral. No aircraft were pledged as collateral as of September 30, 2011.

The Company also has agreements with each of its counterparties associated with its outstanding interest rate swap agreements in which cash collateral may be required based on the fair value of outstanding derivative instruments, as well as the Company's and its counterparty's credit ratings. As of September 30, 2011, $64million had been provided to one counterparty associated with interest rate derivativesbased on the Company's outstanding net liability derivative position with that counterparty. In addition, in connection with interest rate swaps entered into by AirTran, a total of$34 million in collateral had been provided to two counterparties at September 30, 2011, as a result of net liability derivative positions with those counterparties.The outstanding interest rate net derivative positions with all other counterparties at September 30, 2011,were assets to the Company.

In the accompanying unaudited Condensed Consolidated Balance Sheet, the Company has elected to present its cash collateral utilizing a net presentation, in which cash collateral amounts held or provided have been netted against the fair value of outstanding derivative instruments.The Company's application of this policy differs depending on whether its derivative instruments are in a net asset position or a net liability position. If its fuel derivative instruments are in a net asset position with a counterparty, cash collateral amounts held are first netted against current derivative amounts (those that will settle during the twelve months following the balance sheet date) associated with that counterparty until that balance is zero, and then any remainder is applied against the fair value of noncurrent outstanding derivative instruments (those that will settle beyond one year following the balance sheet date). If the Company's fuel derivative instruments are in a net liability position with a counterparty, cash collateral amounts provided are first netted against noncurrent derivative amounts associated with that counterparty until that balance is zero, and then any remainder is applied against the fair value of current outstanding derivative instruments.

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COMPREHENSIVE INCOME

3 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

COMPREHENSIVE INCOME (LOSS)

6.       COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) includes changes in the fair value of certain financial derivative instrumentsthat qualify for hedge accounting, unrealized gains and losses on certain investments, and actuarial gains/losses arising from the Company's postretirement benefit obligation. The differences between Net income (loss) and Comprehensive income (loss) for the three andnine months endedSeptember 30,2011 and 2010, were as follows:

			Three months ended September 30,
(In millions)			2011		2010
Net income (loss)			$	(140)	$	205
	Unrealized gain (loss) on fuel derivative instruments,
		net of deferred taxes of ($233) and $124		(372)		199
	Unrealized gain (loss) on interest rate swaps,
		net of deferred taxes of ($19) and ($7)		(30)		(12)
	Other, net of deferred taxes of ($3) and $1			(4)		1
	Total other comprehensive income (loss)			(406)		188
Comprehensive income (loss)			$	(546)	$	393

			Nine months ended September 30,
(In millions)			2011		2010
Net income			$	26	$	328
	Unrealized gain (loss) on fuel derivative instruments,
		net of deferred taxes of ($137) and $100		(219)		160
	Unrealized gain (loss) on interest rate swaps,
		net of deferred taxes of ($22) and ($21)		(34)		(34)
	Other, net of deferred taxes of $1 and $0			2		(1)
	Total other comprehensive income (loss)			(251)		125
Comprehensive income (loss)			$	(225)	$	453

A rollforward of the amounts included in AOCI, net of taxes, is shown below for the three andnine months ended September 30,2011:

		Fuel		Interest				Accumulated other
		hedge		rate				comprehensive
(In millions)		derivatives		derivatives		Other		income (loss)
Balance at June 30, 2011		$	(97)	$	(38)	$	28	$	(107)
	Changes in fair value		(417)		(30)		(4)		(451)
	Reclassification to earnings		45		-		-		45
Balance at September 30, 2011		$	(469)	$	(68)	$	24	$	(513)

		Fuel		Interest				Accumulated other
		hedge		rate				comprehensive
(In millions)		derivatives		derivatives		Other		income (loss)
Balance at December 31, 2010		$	(250)	$	(34)	$	22	$	(262)
	Changes in fair value		(297)		(34)		2		(329)
	Reclassification to earnings		78		-		-		78
Balance at September 30, 2011		$	(469)	$	(68)	$	24	$	(513)

XML

LONG-TERM DEBT (Details) (USD $)	0 Months Ended
	Sep. 30, 2011	Dec. 31, 2010
Notes to Financial Statements [Abstract]
Net book value of assets pledged as collateral for the company's secured borrowings, primarily aircraft and engines	$ 922,000,000
Long-term Debt, by Maturity [Abstract]
Long Term Debt And Capital Lease Maturities Repayments Of Principal Remainder Of Year	24,000,000
Long Term Debt And Capital Lease Maturities Repayments Of Principal In Year One After Current Year	66,000,000
Long-term Debt, Maturities, Repayments of Principal in Year Two	77,000,000
Long-term Debt, Maturities, Repayments of Principal in Year Three	76,000,000
Long-term Debt, Maturities, Repayments of Principal in Year Four	90,000,000
Long-term Debt, Maturities, Repayments of Principal in Year Five	193,000,000
Long-term Debt, Maturities, Repayments of Principal after Year Five	320,000,000
Line Of Credit, Amount Terminated	100,000,000
Debt assumed in aquisition	1,100,000,000
Conversion option, amount	35,000,000
Debt Instrument, Unamortized Premium	10,000,000
Debt Instrument [Line Items]
Latest maturity date	2017
Less current maturities	986,000,000	505,000,000
Long-term debt less current maturities	3,220,000,000	2,875,000,000
Derivative, Higher Remaining Maturity Range	2020
Derivative, Lower Remaining Maturity Range	2016
AirTran Airways [Member] | Floating-rate B737 aircraft notes payable through 2020 [Member]
Debt Instrument [Line Items]
Collateral to secure loan	note is secured by a first mortgage on the aircraft to which it relates first mortgage on the aircraft to which it relates
Carrying amount of debt	616,000,000
Number of mortgages on secured aircraft	27
Earliest maturity date	2016
Latest maturity date	2020
Weighted average interest rate	1.91%
AirTran Airways [Member] | Fixed-rate B737 aircraft notes payable through 2018 [Member]
Debt Instrument [Line Items]
Carrying amount of debt	43,000,000
Number of mortgages on secured aircraft	3
Latest maturity date	2018
Interest rate stated in the debt agreement (in hundredths)	7.02%
Fixed-rate B737 aircraft notes payable through 2018 [Member]
Debt Instrument [Line Items]
Earliest maturity date	2016
AirTran Airways [Member] | Fixed-rate B717 aircraft notes payable through 2017 [Member]
Debt Instrument [Line Items]
Carrying amount of debt	78,000,000
Number of mortgages on secured aircraft	8
Latest maturity date	April 2017
Weighted average interest rate	10.23%
5.5% Convertible Debt due 2015 [Member]
Debt Instrument [Line Items]
Face amount of debt	70,000,000
Latest maturity date	2015
Interest rate stated in the debt agreement (in hundredths)	5.50%
Shares issued for conversions of debt	6,200,000
Cash paid for conversions of debt	73,000,000
7.0% Convertible Debt Due 2023 [Member]
Debt Instrument [Line Items]
Face amount of debt	5,000,000
Latest maturity date	2023
Interest rate stated in the debt agreement (in hundredths)	7.00%
AirTran Airways [Member] | 5.25% Convertible Debt Due 2016 [Member]
Debt Instrument [Line Items]
Issuance date of debt	October 2009
Face amount of debt	115,000,000
Carrying amount of debt	119,000,000
Interest rate stated in the debt agreement (in hundredths)	5.25%
Conversion ratio	164.136
Extinguishment of Debt, Amount	5,000,000
5.25% Convertible Debt Due 2016 [Member]
Debt Instrument [Line Items]
Face amount of debt	115,000,000
Latest maturity date	2016
5.25% Convertible Debt Due 2016 [Member] | Southwest Airlines Co. [Member]
Debt Instrument [Line Items]
Conversion ratio	52.6877
Conversion Price	$ 615.17
AirTran Airways [Member]
Debt Instrument [Line Items]
Carrying amount of debt	856,000,000
Less current maturities	(75,000,000)
Long-term debt less current maturities	$ 781,000,000

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FAIR VALUE MEASUREMENTS (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2011 Years		Sep. 30, 2011 Years		Dec. 31, 2010
Notes to Financial Statements [Abstract]
Auction frequency	30-35 days
Available For Sale Securities Unrealized Loss	$ 15		$ 15
Auction Rate Securities, Lower Remaining Maturity Range	7		7
Auction Rate Securities, Higher Remaining Maturity Range	36		36
Auction Rate Securities at Time of First Failed Auctions	463		463
Auction Rate Securities Sold At Par After Failed Auctions	367		367
ASSETS [Abstract]
Cash equivalents	891	[1]	891	[1]	1,261
Commercial paper 1	117		117
Certificates of deposit, cash equivalent	8		8
Short-term Investments [Abstract]
Treasury bills	2,354		2,354		2,010
Certificates of deposit, current	226		226		267
Commercial paper 2	60		60
Noncurrent investments [Abstract]
Auction rate securities	81	[2]	81	[2]
Certificates of deposit, noncurrent	25	[2]	25	[2]
Noncurrent investments					93	[3]
Interest rate derivatives 1	64		64		73
Fuel derivative assets [Abstract]
Swap contracts, net liabilities 1	0		0		33	[4]
Option contracts, net liabilities 1	0		0		233	[4]
Swap contracts, net assets 1	216	[4]	216	[4]	286	[5]
Option contracts, net assets 1	582	[4]	582	[4]	788	[5]
Other available-for-sale securities	5		5		39
Total assets	4,629		4,629		5,083
Fuel derivative liability [Abstract]
Swap contracts, net liabilities 2	0		0		387	[4]
Option contracts, net liabilities 2	0		0		119	[4]
Swap contracts, net assets 2	440	[4]	440	[4]	476	[5]
Option contracts, net assets 2	1,015	[4]	1,015	[4]	216	[5]
Interest rate derivatives 2	130		130		4
Total liabilities	1,585		1,585		1,202
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Roll Forward]
Beginning balance	935		784
Total gains or (losses) (realized or unrealized) [Abstract]
Included in earnings	(635)		(438)
Included in other comprehensive income	(627)		(437)
Purchases	105		425
Sales	(93)		(513)
Settlements	(32)		(168)
Ending balance	(347)		(347)
The amount of total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at balance sheet date	(614)		(405)
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
ASSETS [Abstract]
Cash equivalents	891	[1]	891	[1]	1,261
Commercial paper 1	0		0
Certificates of deposit, cash equivalent	0		0
Short-term Investments [Abstract]
Treasury bills	2,354		2,354		2,010
Certificates of deposit, current	0		0		0
Commercial paper 2	0		0
Noncurrent investments [Abstract]
Auction rate securities	0	[2]	0	[2]
Certificates of deposit, noncurrent	0	[2]	0	[2]
Noncurrent investments					0	[3]
Interest rate derivatives 1	0		0		0
Fuel derivative assets [Abstract]
Swap contracts, net liabilities 1	0		0		0	[4]
Option contracts, net liabilities 1	0		0		0	[4]
Swap contracts, net assets 1	0	[4]	0	[4]	0	[5]
Option contracts, net assets 1	0	[4]	0	[4]	0	[5]
Other available-for-sale securities	0		0		34
Total assets	3,245		3,245		3,305
Fuel derivative liability [Abstract]
Swap contracts, net liabilities 2	0		0		0	[4]
Option contracts, net liabilities 2	0		0		0	[4]
Swap contracts, net assets 2	0	[4]	0	[4]	0	[5]
Option contracts, net assets 2	0	[4]	0	[4]	0	[5]
Interest rate derivatives 2	0		0		0
Total liabilities	0		0		0
Significant Other Observable Inputs (Level 2) [Member]
ASSETS [Abstract]
Cash equivalents	0	[1]	0	[1]	0
Commercial paper 1	117		117
Certificates of deposit, cash equivalent	8		8
Short-term Investments [Abstract]
Treasury bills	0		0		0
Certificates of deposit, current	226		226		267
Commercial paper 2	60		60
Noncurrent investments [Abstract]
Auction rate securities	0	[2]	0	[2]
Certificates of deposit, noncurrent	25	[2]	25	[2]
Noncurrent investments					0	[3]
Interest rate derivatives 1	64		64		73
Fuel derivative assets [Abstract]
Swap contracts, net liabilities 1	0		0		33	[4]
Option contracts, net liabilities 1	0		0		0	[4]
Swap contracts, net assets 1	216	[4]	216	[4]	286	[5]
Option contracts, net assets 1	0	[4]	0	[4]	0	[5]
Other available-for-sale securities	0		0		0
Total assets	716		716		659
Fuel derivative liability [Abstract]
Swap contracts, net liabilities 2	0		0		387	[4]
Option contracts, net liabilities 2	0		0		0	[4]
Swap contracts, net assets 2	440	[4]	440	[4]	476	[5]
Option contracts, net assets 2	0	[4]	0	[4]	0	[5]
Interest rate derivatives 2	130		130		4
Total liabilities	570		570		867
Significant Unobservable Inputs (Level 3) [Member]
ASSETS [Abstract]
Cash equivalents	0	[1]	0	[1]	0
Commercial paper 1	0		0
Certificates of deposit, cash equivalent	0		0
Short-term Investments [Abstract]
Treasury bills	0		0		0
Certificates of deposit, current	0		0		0
Commercial paper 2	0		0
Noncurrent investments [Abstract]
Auction rate securities	81	[2]	81	[2]
Certificates of deposit, noncurrent	0	[2]	0	[2]
Noncurrent investments					93	[3]
Interest rate derivatives 1	0		0		0
Fuel derivative assets [Abstract]
Swap contracts, net liabilities 1	0		0		0	[4]
Option contracts, net liabilities 1	0		0		233	[4]
Swap contracts, net assets 1	0	[4]	0	[4]	0	[5]
Option contracts, net assets 1	582	[4]	582	[4]	788	[5]
Other available-for-sale securities	5		5		5
Total assets	668		668		1,119
Fuel derivative liability [Abstract]
Swap contracts, net liabilities 2	0		0		0	[4]
Option contracts, net liabilities 2	0		0		119	[4]
Swap contracts, net assets 2	0	[4]	0	[4]	0	[5]
Option contracts, net assets 2	1,015	[4]	1,015	[4]	216	[5]
Interest rate derivatives 2	0		0		0
Total liabilities	1,015		1,015		335
Fuel Derivatives [Member]
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Roll Forward]
Beginning balance	846		686
Total gains or (losses) (realized or unrealized) [Abstract]
Included in earnings			(438)
Included in other comprehensive income	(624)		(439)
Purchases	105		425
Sales	(93)		(499)
Settlements	(32)		(168)
Ending balance	(433)		(433)
The amount of total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at balance sheet date	(614)		(405)
Auction Rate Securities [Member]
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Roll Forward]
Beginning balance	84		93
Total gains or (losses) (realized or unrealized) [Abstract]
Included in earnings	0		0
Included in other comprehensive income	(3)		2
Purchases	0		0
Sales	0		(14)
Settlements	0		0
Ending balance	81		81
The amount of total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at balance sheet date	0		0
Other Securities [Member]
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Roll Forward]
Beginning balance	5		5
Total gains or (losses) (realized or unrealized) [Abstract]
Included in earnings	0		0
Included in other comprehensive income	0		0
Purchases	0		0
Sales	0		0
Settlements	0		0
Ending balance	5	[6],[7]	5	[6],[7]
The amount of total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at balance sheet date	0		0
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
10.5% Notes Due 2011	399		399
Term Loan Agreement due 2020 - 5.223%	496		496
Term Loan Agreement due 2019 - 6.64%	276		276
Term Loan Agreement due 2019 - 6.84%	105		105
French Credit Agreements due 2012	10		10
6.5% Notes due 2012	379		379
5.25% Notes due 2014	350		350
5.75% Notes due 2016	271		271
5.125% Notes due 2017	300		300
French Credit Agreements due 2017	69		69
Pass Through Certificates due 2022	411		411
7.375% Debentures due 2027	64		64
Floating-rate B737 aircraft notes payable through 2020	634		634
Notes Payable Aircraft Fixed Rate Through 2018	41		41
Notes Payable Aircraft Fixed Rate Through 2017	68		68
Convertible Debt Due 2016	120		120
Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
10.5% Notes Due 2011	391		391
Term Loan Agreement due 2020 - 5.223%	447		447
Term Loan Agreement due 2019 - 6.64%	282		282
Term Loan Agreement due 2019 - 6.84%	114		114
French Credit Agreements due 2012	10		10
6.5% Notes due 2012	385		385
5.25% Notes due 2014	367		367
5.75% Notes due 2016	298		298
5.125% Notes due 2017	322		322
French Credit Agreements due 2017	69		69
Pass Through Certificates due 2022	420		420
7.375% Debentures due 2027	81		81
Floating-rate B737 aircraft notes payable through 2020	634		634
Notes Payable Aircraft Fixed Rate Through 2018	44		44
Notes Payable Aircraft Fixed Rate Through 2017	73		73
Convertible Debt Due 2016	$ 114		$ 114

[1] Cash equivalents is primarily composed of money market investments.

[2] Noncurrent investments are included in Other assets in the unaudited Condensed Consolidated Balance Sheet.

[3] Auction rate securities included in Other assets in the unaudited Condensed Consolidated Balance Sheet.

[4] In the unaudited Condensed Consolidated Balance Sheet, amounts are presented as a net liability, and are also net of cash collateral provided to counterparties. See Note 5.

[5] In the unaudited Condensed Consolidated Balance Sheet, amounts are presented as a net asset, and are also net of cash collateral received from or provided to counterparties. See Note 5.

[6] (a) Included in Other assets in the unaudited Condensed Consolidated Balance Sheet.

[7] * Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note.

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FINANCIAL DERIVATIVE INSTRUMENTS (Tables)

0 Months Ended

3 Months Ended

Sep. 30, 2011

Dec. 31, 2010

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Volume of fuel hedging

	Fuel hedged as of
	September 30, 2011
Period (by year)	(gallons in millions)
Fourth quarter 2011	177
2012	1,341
2013	969
2014	777
2015	357

Schedule of derivative instruments in statement of financial position, fair value

			Asset derivatives				Liability derivatives
	Balance Sheet	Fair value at		Fair value at		Fair value at		Fair value at
(in millions)	location	9/30/2011		12/31/10		9/30/2011		12/31/10
Derivatives designated as hedges*
Fuel derivative contracts (gross)	Other current assets	$	-	$	151	$	-	$	16
Fuel derivative contracts (gross)	Other assets		-		547		-		88
Fuel derivative contracts (gross)	Accrued liabilities		71		122		138		18
Fuel derivative contracts (gross)	Other noncurrent liabilities		361		71		157		9
Interest rate derivative contracts	Other current assets		1		73		6		-
Interest rate derivative contracts	Other assets		63		-		-		-
Interest rate derivative contracts	Other noncurrent liabilities		-		-		136		4
Total derivatives designated as hedges		$	496	$	964	$	437	$	135
Derivatives not designated as hedges*
Fuel derivative contracts (gross)	Other current assets	$	-	$	164	$	-	$	284
Fuel derivative contracts (gross)	Other assets		-		212		-		304
Fuel derivative contracts (gross)	Accrued liabilities		257		40		525		222
Fuel derivative contracts (gross)	Other noncurrent liabilities		109		33		635		257
Total derivatives not designated as hedges		$	366	$	449	$	1,160	$	1,067
Total derivatives		$	862	$	1,413	$	1,597	$	1,202
* Represents the position of each trade before consideration of offsetting positions with each counterparty and does not include the impact of cash collateral deposits provided to or received from counterparties. See discussion of credit risk and collateral following in this Note.

Cash collateral deposits, due to/from third parties, and net unrealized gains/losses

		Balance Sheet	September 30,		December 31,
(in millions)		location	2011		2010
Cash collateral deposits provided		Offset against Other
	to counterparties - noncurrent	noncurrent liabilities	$	246	$	125
Cash collateral deposits provided		Offset against Accrued
	to counterparties - current	liabilities		212		-
Cash collateral deposits held from		Offset against Other
	counterparty - noncurrent	assets		-		60
Cash collateral deposits held from		Offset against Other
	counterparty - current	current assets		-		-
Due to third parties for settled fuel contracts		Accrued liabilities		10		-
Receivable from third parties for settled		Accounts and other
	fuel contracts	receivables		-		1
Net unrealized (gains) losses from fuel		Accumulated other
	hedges, net of tax	comprehensive (income) loss		469		250

Derivatives in cash flow hedging relationships

Derivatives in cash flow hedging relationships
		(Gain) loss							(Gain) loss					(Gain) loss
		recognized in AOCI on							reclassified from AOCI					recognized in income
		derivatives (effective							into income (effective					on derivatives
		portion)							portion)(a)						(ineffective portion) (b)
		Three months ended						Three months ended						Three months ended
		September 30,						September 30,						September 30,
(in millions)		2011			2010			2011			2010			2011		2010
Fuel derivative
	contracts	$	417	*	$	(122)	*	$	45	*	$	77	*	$	85	$	(24)
Interest rate
	derivatives		30	*		12	*		-			-			-		-
Total		$	447		$	(110)		$	45		$	77		$	85	$	(24)
*	Net of tax
(a)	Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively.
(b)	Amounts are included in Other (gains) losses, net.

Derivatives in cash flow hedging relationships
		(Gain) loss							(Gain) loss					(Gain) loss
		recognized in AOCI on							reclassified from AOCI					recognized in income
		derivatives (effective							into income (effective					on derivatives
		portion)							portion)(a)						(ineffective portion) (b)
		Nine months ended						Nine months ended						Nine months ended
		September 30,						September 30,						September 30,
(in millions)		2011			2010			2011			2010			2011		2010
Fuel derivative
	contracts	$	297	*	$	66	*	$	78	*	$	226	*	$	127	$	26
Interest rate
	derivatives		34	*		34	*		-			-			-		-
Total		$	331		$	100		$	78		$	226		$	127	$	26
*	Net of tax
(a)	Amounts related to fuel derivative contracts and interest rate derivatives are included in Fuel and oil and Interest expense, respectively.
(b)	Amounts are included in Other (gains) losses, net.

Derivatives not in cash flow hedging relationships

Derivatives not in cash flow hedging relationships
	(Gain) loss
	recognized in income on
	derivatives
	Three months ended				Location of (gain) loss
	September 30,				recognized in income
(in millions)	2011		2010		on derivatives
Fuel derivative contracts	$	284	$	(26)	Other (gains) losses, net

Derivatives not in cash flow hedging relationships
	(Gain) loss
	recognized in income on
	derivatives
	Nine months ended				Location of (gain) loss
	September 30,				recognized in income
(in millions)	2011		2010		on derivatives
Fuel derivative contracts	$	129	$	13	Other (gains) losses, net

Fair values of fuel derivatives, amounts posted as collateral, and collateral posting threshold amounts

Counterparty (CP)

A

B

C

D

E

Other(a)

Total

(in millions)

Fair value of fuel derivatives

$

(256)

$

(228)

$

(95)

$

(50)

$

(23)

$

(5)

$

(657)

Cash collateral held from (by) CP

(205)

(220)

(33)

-

-

-

(458)

If credit rating is investment

grade, fair value of fuel

derivative level at which:

Cash is provided to CP

0 to (300)

0 to (125)

>(50)

>(75)

>(50)

or >(700)

or >(625)

Cash is received from CP

>40

>150

>200(c)

>125(c)

>250

Aircraft or cash can be pledged to CP

(300) to

(125) to

N/A

N/A

N/A

(700)(d)

(625)(d)

If credit rating is non-investment

grade, fair value of fuel derivative

level at which:

Cash is provided to CP

0 to (300)

0 to (125)

(b)

(b)

(b)

or >(700)

or >(625)

Cash is received from CP

(b)

(b)

(b)

(b)

(b)

Aircraft can be pledged to CP

(300) to

(125) to

N/A

N/A

N/A

(700)

(625)

(a) Individual counterparties with fair value of fuel derivatives <$15 million.

(b) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts.

(c) Thresholds may vary based on changes in credit ratings within investment grade.

(d) The Company has the option of providing cash or pledging aircraft as collateral. No aircraft were pledged as collateral as of September 30, 2011.

XML

OTHER ASSETS AND LIABILITIES

3 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

OTHER ASSETS AND LIABILITIES

7.OTHER ASSETS AND LIABILITIES

		September 30,		December 31,
(In millions)		2011		2010
Derivative contracts		$	-	$	307
Intangible assets			168		60
Non-current investments			112		97
Other			207		142
	Other assets	$	487	$	606

		September 30,		December 31,
(In millions)		2011		2010
Retirement plans		$	83	$	171
Aircraft rentals			107		27
Vacation pay			239		200
Advances and deposits			39		33
Derivative contracts			116		79
Workers compensation			155		142
Deferred taxes			159		-
Other			295		211
	Accrued liabilities	$	1,193	$	863

		September 30,		December 31,
(In millions)		2011		2010
Postretirement obligation		$	105	$	91
Non-current leasehold interest			337		-
Construction obligation			152		86
Other			332		288
	Other non-current liabilities	$	926	$	465

XML

LONG-TERM DEBT (Tables)

0 Months Ended

Sep. 30, 2011

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

(In millions)		September 30, 2011
B737 Aircraft Purchase Financing Facilities:
Floating-rate aircraft notes payable through 2020, 1.91 percent
weighted-average interest rate as of September 30, 2011	$	616
Fixed-rate aircraft notes payable through 2018, 7.02 percent
weighted-average interest rate as of September 30, 2011		43
Fixed-rate B717 aircraft notes payable through 2017, 10.43 percent
weighted-average interest rate as of September 30, 2011		78
5.25% convertible senior notes due 2016		119
Total long-term debt		856
Less current maturities of long-term debt		(75)
Long-term debt less current maturities	$	781

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COMMITMENTS AND CONTINGENCIES (Details) (USD $) In Millions	3 Months Ended
	Sep. 30, 2011	Dec. 31, 2010
Contingencies: [Abstract]
Municipal Bonds Issued		$ 310
Expected total LFMP cost	519
Line of Credit Facility [Abstract]
Line of credit facility, maximum borrowing capacity	$ 800
Revolving credit facility initiation date	April 28, 2011
Revolving credit facility expiration date	April 2016
Line of Credit Facility, Covenant Terms	The new facility also contains a financial covenant requiring a minimum coverage ratio of adjusted pre-tax income to fixed obligations, as defined.
Line of Credit Facility, Covenant Compliance	the Company was in compliance with this covenant

XML

BASIS OF PRESENTATION

3 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

BASIS OF PRESENTATION

1.       BASIS OF PRESENTATION

The accompanying unaudited Condensed Consolidated Financial Statements of Southwest Airlines Co. and its subsidiaries (the “Company” or “Southwest”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The unaudited Condensed Consolidated Financial Statements for the interim periods ended September 30, 2011 and 2010include all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. This includes all normal and recurring adjustments and elimination of significant intercompany transactions, but does not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) for complete financial statements. Financial results for the Company and airlines in general can be seasonal in nature. In many years, the Company's revenues, as well as its operating income and net income, have been better in its second and third fiscal quarters than in its first and fourth fiscal quarters. Air travel is also significantly impacted by general economic conditions, the amount of disposable income available to consumers, unemployment levels, and corporate travel budgets. These and other factors, such as the price of jet fuel in some periods, the nature of the Company's fuel hedging program, the periodic volatility of commodities used by the Company for hedging jet fuel, and the requirements related to hedge accounting, have created, and may continue to create, significant volatility in the Company's financial results. See Note 5 for further information on fuel and the Company's hedging program. Operating results for the three and ninemonths endedSeptember 30,2011are not necessarily indicative of the results that may be expected for the year ended December 31, 2011. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Southwest Airlines Co. Annual Report on Form 10-K for the year ended December 31, 2010.

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FAIR VALUE MEASUREMENTS (Tables)

0 Months Ended

Sep. 30, 2011

Dec. 31, 2010

Notes to Financial Statements [Abstract]

Assets and liabilities measured at fair value on a recurring basis

					Fair value measurements at reporting date using
				Quoted prices in active markets for identical assets			Significant other observable inputs		Significant unobservable inputs
Description		September 30, 2011			(Level 1)		(Level 2)		(Level 3)
Assets		(in millions)
Cash equivalents
	Cash equivalents (a)	$	891		$	891	$	-	$	-
	Commercial paper		117			-		117		-
	Certificates of deposit		8			-		8		-
Short-term investments:
	Treasury bills		2,354			2,354		-		-
	Certificates of deposit		226			-		226		-
	Commercial paper		60			-		60		-
Noncurrent investments (b)
	Auction rate securities		81			-		-		81
	Certificates of deposit		25			-		25		-
Interest rate derivatives (see Note 5)			64			-		64		-
Fuel derivatives:
	Swap contracts (c)		216			-		216		-
	Option contracts (c)		582			-		-		582
Other available-for-sale securities			5			-		-		5
Total assets		$	4,629		$	3,245	$	716	$	668
Liabilities
Fuel derivatives:
	Swap contracts (c)	$	(440)		$	-	$	(440)	$	-
	Option contracts (c)		(1,015)			-		-		(1,015)
Interest rate derivatives (see Note 5)			(130)			-		(130)		-
Total liabilities		$	(1,585)		$	-	$	(570)	$	(1,015)
(a)	Cash equivalents is primarily composed of money market investments.
(b)	Noncurrent investments are included in Other assets in the unaudited Condensed Consolidated Balance Sheet.
(c)	In the unaudited Condensed Consolidated Balance Sheet, amounts are presented as a net liability, and are also net of cash collateral provided to counterparties. See Note 5.
(d)	In the unaudited Condensed Consolidated Balance Sheet, amounts are presented as a net asset, and are also net of cash collateral received from or provided to counterparties. See Note 5.

				Fair value measurements at reporting date using
				Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
Description		December 31, 2010		(Level 1)		(Level 2)			(Level 3)
Assets		(in millions)
Cash equivalents		$	1,261	$	1,261	$	-	$	-
Short-term investments:
	Treasury bills		2,010		2,010		-		-
	Certificates of deposit		267		-		267		-
Noncurrent investments (a)			93		-		-		93
Interest rate derivatives			73		-		73		-
Fuel derivatives:
	Swap contracts (b)		33		-		33		-
	Option contracts(b)		233		-		-		233
	Swap contracts (c)		286		-		286		-
	Option contracts(c)		788		-		-		788
Other available-for-sale securities			39		34		-		5
Total assets		$	5,083	$	3,305	$	659	$	1,119
Liabilities
Fuel derivatives:
	Swap contracts (b)	$	(387)	$	-	$	(387)	$	-
	Option contracts(b)		(119)		-		-		(119)
	Swap contracts (c)		(476)		-		(476)		-
	Option contracts(c)		(216)		-		-		(216)
Interest rate derivatives			(4)		-		(4)		-
Total liabilities		$	(1,202)	$	-	$	(867)	$	(335)
(a)	Auction rate securities included in Other assets in the unaudited Condensed Consolidated Balance Sheet.
(b)	In the unaudited Condensed Consolidated Balance Sheet, amounts are presented as a net liability, and are also net of cash collateral provided to counterparties. See Note 5.
(c)	In the unaudited Condensed Consolidated Balance Sheet, amounts are presented as a net asset, and are also net of cash collateral received from counterparties. See Note 5.

Fair Value Measurements Using Significant Unobservable Inputs

		Fair value measurements using significant
		unobservable inputs (Level 3)
		Fuel		Auction rate			Other
(in millions)		derivatives		securities			securities		Total
Balance at June 30, 2011		$	846	$	84		$	5	$	935
Total gains or (losses) (realized or unrealized)
	Included in earnings		(635)		-			-		(635)
	Included in other comprehensive income		(624)		(3)			-		(627)
Purchases			105		-			-		105
Sales			(93)		-			-		(93)
Settlements			(32)		-			-		(32)
Balance at September 30, 2011		$	(433)	$	81	(a)	$	5	$	(347)
The amount of total gains or (losses) for the
	period included in earnings attributable to the
	change in unrealized gains or losses relating to
	assets still held at September 30, 2011	$	(614)	$	-		$	-	$	(614)
(a) Included in Other assets in the unaudited Condensed Consolidated Balance Sheet.

		Fair value measurements using significant
		unobservable inputs (Level 3)
		Fuel		Auction rate			Other
(in millions)		derivatives		securities			securities		Total
Balance at December 31, 2010		$	686	$	93		$	5	$	784
Total gains or (losses) (realized or unrealized)
	Included in earnings		(438)		-			-		(438)
	Included in other comprehensive income		(439)		2			-		(437)
Purchases			425		-			-		425
Sales			(499)		(14)			-		(513)
Settlements			(168)		-			-		(168)
Balance at September 30, 2011		$	(433)	$	81	(a)	$	5	$	(347)
The amount of total gains or (losses) for the
	period included in earnings attributable to the
	change in unrealized gains or losses relating to
	assets still held at September 30, 2011	$	(405)	$	-		$	-	$	(405)
(a) Included in Other assets in the unaudited Condensed Consolidated Balance Sheet.

Fair value, by Balance Sheet Grouping

	Carrying		Estimated fair
(In millions)	value		value
10.5% Notes due 2011	$	399	$	391
French credit agreements due 2012		10		10
6.5% Notes due 2012		379		385
5.25% Notes due 2014		350		367
5.75% Notes due 2016		271		298
5.25% Convertible senior notes due 2016		120		114
5.125% Notes due 2017		300		322
French credit agreements due 2018		69		69
Fixed-rate B717 aircraft notes payable through 2017 - 10.43%		68		73
Fixed-rate B737 aircraft notes payable through 2018 - 7.02%		41		44
Term loan agreement due 2019 - 6.64%		276		282
Term loan agreement due 2019 - 6.84%		105		114
Term loan agreement due 2020 - 5.223%		496		447
Floating rate B737 aircraft notes payable through 2020 - 1.91%		634		634
Pass through certificates due 2022		411		420
7.375% Debentures due 2027		64		81

XML

NET INCOME PER SHARE (Details) (USD $) In Millions, except Per Share data	3 Months Ended		9 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010
Notes to Financial Statements [Abstract]
Net income (loss)	$ (140)	$ 205	$ 26	$ 328
Weighted average shares outstanding, basic	792	746	773	745
Dilutive effect of Employee stock options (in millions of shares)	0	1	1	1
Weighted Average Number of Shares Outstanding, Diluted	792	747	774	746
NET INCOME (LOSS) PER SHARE [Abstract]
Net income per share, basic	$ (0.18)	$ 0.27	$ 0.03	$ 0.44
Net income per share, diluted	$ (0.18)	$ 0.27	$ 0.03	$ 0.44
Antidilutive stock options excluded from calculations	48	64	48	70

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ACCOUNTING CHANGES AND NEW ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

ACCOUNTING CHANGES AND NEW ACCOUNTING PRONOUNCEMENTS

3. ACCOUNTING CHANGES AND NEW ACCOUNTING PRONOUNCEMENTS

On December 29, 2010, the Financial Accounting Standards Board (“FASB”) ratified Accounting Standards Update (“ASU”) No. 2010-29, “Disclosure of Supplementary Pro Forma Information for Business Combinations.”This ASU specifies that when a business combination occurs, the company must only disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period. This ASU also expands the supplemental pro forma disclosures under Topic 805, “Business Combinations”, formerly Statement of Financial Accounting Standards No. 141(R), to include a description of the nature and amount of material, non-recurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.This ASU is effective prospectively for business combinations in which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010.Because the Company acquired AirTran on May 2, 2011, the Company implemented this ASU for the interim period ended June 30, 2011. The Company has prepared pro forma disclosures to include the effects of the AirTran acquisition as if it had been consummated as of January 1, 2010. There are no non-recurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. See Note 2.

On May 12, 2011, the FASB ratified ASU No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS.”This ASU establishes a global standard for measuring amounts at fair value. This ASU will not have a material effect on the Company's financial position or results of operations, but will change the Company's disclosure policies for fair value.This ASU is effective for reporting periods (including interim periods) beginning after December 15, 2011. For the Company, this ASU will first take effect for the first quarter ending March 31, 2012. Early adoption is not permissible, and this ASU must be applied prospectively.

On June 16, 2011, the FASB ratified ASU No. 2011-05, “Presentation of Comprehensive Income.” This ASU eliminates the current option to report other comprehensive income and its components in the statement of changes in equity.Upon adoption, other comprehensive income must be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This ASU will not have a material effect on the Company's financial position or results of operations, but will change the Company's disclosure policies for other comprehensive income. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. This ASU must be applied retrospectively and early adoption is permitted.The Company will adopt this ASU for the interim period ending March 31, 2012.

On September 15, 2011, the FASB ratified ASU No. 2011-08, “Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” This ASU permits an entity to first assess qualitative factors to determine whether it is more likely than not (a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount. After assessing qualitative factors, if an entity determines that it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, no further testing is necessary. If an entity determines that it is more likely than not that the fair value of the reporting unit is less than its carrying value, then the traditional two-step goodwill impairment test must be performed. As a result of the acquisition of AirTran on May 2, 2011, the Company recognized goodwill. The Company plans to perform its annual impairment test during the fourth quarter ending December 31, 2011. This ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. However, early adoption is permitted. The Company is currently evaluating the impact of ASU No. 2011-08 on its future goodwill impairment tests.

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ACQUISITION AND RELATED MATTERS (Tables)

0 Months Ended

3 Months Ended

Sep. 30, 2011

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Allocation of Acquisition Price [Table Text Block]

(in millions)		May 2, 2011
Assets
	Cash and cash equivalents	$	477
	Restricted cash		6
	Other current assets		234
	Operating property and equipment		1,151
	Goodwill		970
	Other identified intangibles		125
	Deferred income taxes		163
	Other noncurrent assets		45
Liabilities
	Long-term debt and capital leases, including current portion		(1,119)
	Air traffic liability		(354)
	Other liabilities assumed		(657)
Net assets acquired		$	1,041

Intangible Assets Acquired [Table Block]

		Estimated
		fair value of	Weighted-average		Accumulated
		asset/(liability)	useful life		amortization
		(in millions)	(in years)		(in millions)
Customer relationships/marketing agreements	$	39	4	$	8
Trademarks/trade names		36	3		5
Domestic Slots		43	24		1
Internally developed software		2	2		1
Noncompete agreements		5	2		1
Total	$	125	10	$	16

Pro Forma Results of Operations [Table Text Block]

		Three months ended				Nine months ended
		September 30,				September 30,
(In millions, except per share data)		2011		2010		2011		2010
Total operating revenues	$	4,312	$	3,860	$	12,495	$	10,961
Net income		(157)		231		7		345
Net income per share, basic		(0.20)		0.29		0.01		0.44
Net income per share, diluted		(0.20)		0.29		0.01		0.44

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OTHER ASSETS AND LIABILITIES (Tables)

0 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

Other Assets [Table Text Block]

		September 30,		December 31,
(In millions)		2011		2010
Derivative contracts		$	-	$	307
Intangible assets			168		60
Non-current investments			112		97
Other			207		142
	Other assets	$	487	$	606

Accrued liabilities [Table Text Block]

		September 30,		December 31,
(In millions)		2011		2010
Retirement plans		$	83	$	171
Aircraft rentals			107		27
Vacation pay			239		200
Advances and deposits			39		33
Derivative contracts			116		79
Workers compensation			155		142
Deferred taxes			159		-
Other			295		211
	Accrued liabilities	$	1,193	$	863

Other noncurrent liabilities [Table Text Block]

		September 30,		December 31,
(In millions)		2011		2010
Postretirement obligation		$	105	$	91
Non-current leasehold interest			337		-
Construction obligation			152		86
Other			332		288
	Other non-current liabilities	$	926	$	465

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Condensed Consolidated Balance Sheet (USD $) In Millions	Sep. 30, 2011	Dec. 31, 2010
Current assets [Abstract]
Cash and Cash Equivalents, at Carrying Value	$ 1,016	$ 1,261
Short-term Investments	2,640	2,277
Accounts and other receivables	369	195
Inventories of parts and supplies, at cost	459	243
Deferred income taxes	0	214
Prepaid expenses and other current assets	110	89
Total current assets	4,594	4,279
Property and equipment, at cost [Abstract]
Flight equipment	15,451	13,991
Ground property and equipment	2,303	2,122
Deposits on flight equipment purchase contracts	229	230
Property and equipment, at cost	17,983	16,343
Less allowance for depreciation and amortization	6,149	5,765
Property and equipment, net	11,834	10,578
Goodwill	970	0
Other assets	487	606
Total assets	17,885	15,463
Current liabilities [Abstract]
Accounts payable	1,083	739
Accrued liabilities	1,193	863
Air traffic liability	2,058	1,198
Less current maturities	986	505
Total current liabilities	5,320	3,305
Long-term debt less current maturities	3,220	2,875
Deferred income taxes	1,856	2,493
Deferred gains from sale and leaseback of aircraft	78	88
Other non-current liabilities	926	465
Stockholders' equity [Abstract]
Common stock	808	808
Capital in excess of par value	1,222	1,183
Retained earnings	5,251	5,399
Accumulated other comprehensive income (loss)	(513)	(262)
Treasury stock, at cost	(283)	(891)
Total stockholders' equity	6,485	6,237
Total liabilities and stockholders' equity	$ 17,885	$ 15,463