Earlier this month, shares of Southwest Airlines (NYSE: LUV) were nearing a 52-week high, as investors grew more confident about the airline industry's post-pandemic recovery.

That optimism has disappeared almost overnight. Southwest Airlines stock has fallen 16% since topping out on July 11, punctuated by a 9% drop after its earnings report on Thursday. While the airline giant continues to have a strong balance sheet, its once-vaunted business model is in shambles. That makes Southwest Airlines stock a bad bet compared to better-managed and more profitable peers.

Southwest Airlines reported subpar second-quarter results this week (though they met Wall Street's low expectations). Unit revenue fell 8.3% from last year's elevated level, more than offsetting the tailwind from lower fuel prices.

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Source Fool.com