The question is what does it actually cost to operate a flight profitably? With the adoption of internet pricing, most customers select their flight according to cost of ticket. Convienence and service are well down the priority list. The result is it becomes necessary for the carrier to list the ticket price well below the cost to operate. Carriers have figured out that the area that will generate the profit is in the cafeteria of add on fees.

It's all a function of the switch to internet booking.

SWA does not participate in the internet travel booking sites such as Expedia or Travelocity. So, they are not compared as apples to apples. Rather, they make you go to their website in order to book. Many people will not bother to then compare the "complete" deal at SWA reservations with the "complete" deal at a legacy carrier. SWA is no cheaper. They are just better at making people think that they are cheaper. The baggage advertisment is a good example. Perception is everything.