While most airline stocks moved upward today (in small part due to a drop in the price of oil) shares of Southwest Airlines were one of  the few exceptions.

While the price of crude was down almost $2 on the day, closing at 63.15, shares of Southwest were down almost 2%, ending the day at  14.24 and change. (I’m writing this before the end of day numbers are final.)

So what was the instigator to this drop while most airlines frolicked?

Prudential Equity Group analyst Bob McAdoo downgraded Southwest shares  to “underweight” from “overweight,” saying Southwest’s “model doesn’t appear to be working anymore.”

He said the carrier continues to add aircraft at a rate of 35 or more a year, even while most of the 73 new markets it’s entered since early 2003 have been “consistent money-losers.”

“Lacking some new direction, we believe LUV shares are going nowhere,” he wrote in a note to investors. 

This shouldn’t come as news to anyone — as questions over the airline’s continued growth push, in the face of continued lessening demand at higher fares, first cropped up last fall, as I commented on at the time. The event then was the airline’s media day, and I was a little surprised at CEO Gary Kelly’s comments then that seemed, well, a bit overly exuberant, concerning the airline continuing its planned growth targets in 2007.  Actually he said then that if the airline could find more airplanes on the secondary market that met their needs, they would grab them as well. And they have done just that — picking up another pair of aircraft in addition to the new Boeing 737-700 aircraft already in the pipeline for this year.

Then, as the airline reported first quarter results, the earnings call for Southwest became one of the most contentious of the season, as analyst after analyst peppered Kelly with questions concerning the airline’s continued emphasis on more growth.