May 5, 1995 - S-3: Registration statement for specified transactions by certain issuers | Southwest Airlines Co. (LUV)

As filed with the Securities and Exchange Commission on May 5, 1995
Reg. No. 33 - ________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

____________________

FORM S-3
Registration Statement
Under
The Securities Act of 1933

SOUTHWEST AIRLINES CO.
(Exact name of registrant as specified in its charter)

Texas 74-1563240
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

2702 Love Field Drive
P.O. Box 36611
Dallas, Texas 75235-1611
214/904-4000

(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

JOHN D. OWEN
Treasurer
Southwest Airlines Co.
2702 Love Field Drive
P.O. Box 36611
Dallas, Texas 75235-1611
214/904-4334
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

Copy to:
____________________

Deborah Ackerman
Associate General Counsel
Southwest Airlines Co.
P.O. Box 36611
Dallas, Texas 75235-1611
214/904-4665
____________________

Approximate date of commencement of proposed sale to the public: From
time to time, after the effective date of this Registration Statement.
____________________

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]

If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]

CALCULATION OF REGISTRATION FEE

* Estimated solely for the purpose of calculating the registration fee. The
aggregate public offering price of the Debt Securities and Pass Through
Certificates registered hereby will not exceed $400,000,000.

** Plus such additional principal amount as may be necessary such that, if any
of these securities are issued with an original issue discount, the principal
amount will be increased such that the aggregate proceeds will equal
$400,000,000.

Pursuant to the provisions of Rule 429 under the Securities Act of
1933, one of the prospectuses contained in this Registration Statement also
relates to the remaining unsold $98,050,779 principal amount of Pass Through
Certificates previously registered under Registration Statement on Form S-3
(File No. 33-54587).

____________________

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================
EXPLANATORY NOTE

This Registration Statement consists of two separate Prospectuses,
covering Debt Securities and Pass Through Certificates, respectively.
PROSPECTUS

Southwest Airlines Co.

Debt Securities

____________________

Southwest Airlines Co. (the "Company") intends to issue from time to
time unsecured debt securities (the "Debt Securities") from which the Company
will receive up to an aggregate of $400,000,000 in proceeds and which will be
offered on terms determined by market conditions at the time of sale. The Debt
Securities may be issued in one or more series with the same or various
maturities, at par or with an original issue discount. The specific
designation, aggregate principal amount, authorized denominations, offering or
purchase price, maturity, rate and time of payment of any interest, any
redemption terms or other specific terms and any listing on a securities
exchange of the Debt Securities in respect of which this Prospectus is being
delivered (the "Offered Debt Securities") are set forth in the accompanying
Prospectus Supplement (the "Prospectus Supplement"), together with any other
terms of offering of the Offered Debt Securities.

____________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL
OFFENSE.

____________________

This Prospectus may not be used to consummate sales of the Debt
Securities unless accompanied by a Prospectus Supplement.

____________________

THE DATE OF THIS PROSPECTUS IS , 1995.
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith files reports,
proxy or information statements and other information with the Securities and
Exchange Commission (the "Commission") relating to its business, financial
position, results of operations and other matters. Such reports, proxy or
information statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at certain
of its Regional Offices, located at Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661-2511; and Seven World Trade Center, New York, New York
10048. Copies of such material can also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Such material can also be inspected and copied at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.

The Company has filed with the Commission a Registration Statement
under the Securities Act of 1933 with respect to the Debt Securities offered
hereby. This Prospectus does not contain all of the information set forth in
such Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. Reference is made to such
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the Debt Securities offered hereby.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, heretofore filed with the Commission, is incorporated by
reference herein and made a part hereof.

In addition, all documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 subsequent to
the date of this Prospectus and prior to the termination of the offering of the
Debt Securities offered hereby shall be deemed incorporated herein by reference
and such documents shall be deemed to be a part hereof from the date of filing
such documents. Any statement contained herein or in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein or in the accompanying
Prospectus Supplement modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE FOREGOING DOCUMENTS INCORPORATED HEREIN BY REFERENCE
(OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO THE DOCUMENTS THAT THIS PROSPECTUS
INCORPORATES). WRITTEN OR TELEPHONE REQUESTS SHOULD BE DIRECTED TO: SOUTHWEST
AIRLINES CO., P.O. BOX 36611, DALLAS, TEXAS 75235, ATTENTION: JOHN D. OWEN,
TREASURER (TELEPHONE 214/904-4334).
THE COMPANY

Southwest Airlines Co. ("Southwest" or the "Company") is a major
domestic airline which provides single class air transportation characterized
by frequent, high quality service at affordable prices. Southwest primarily
serves short-haul city pairs, targeting the business commuter as well as
leisure travelers.

The Company was incorporated in Texas in 1967. The Company's
principal executive offices are located at 2702 Love Field Drive, Dallas, Texas
75235. The Company's mailing address is P.O. Box 36611, Love Field, Dallas,
Texas 75235, where its telephone number is 214/904-4000.

RATIOS OF EARNINGS TO FIXED CHARGES

SOUTHWEST AIRLINES CO.

____________

Debt Securities

PROSPECTUS

____________

PROSPECTUS

SOUTHWEST AIRLINES CO.
PASS THROUGH CERTIFICATES

Up to $498,050,779 aggregate principal amount of Pass Through
Certificates (the "Certificates") may be offered for sale from time to time
pursuant to this Prospectus and related Prospectus Supplements. Certificates
may be issued in one or more series in amounts, at prices and on terms to be
determined at the time of the offering. In respect of each offering of
Certificates, a separate Southwest Airlines Pass Through Trust for each series
of Certificates being offered (each, a "Trust") will be formed pursuant to the
Pass Through Trust Agreement (the "Basic Agreement") and the supplement thereto
(a "Trust Supplement") relating to such Trust between Southwest Airlines Co.
("Southwest" or the "Company") and Wilmington Trust Company (the "Trustee"), as
trustee under each Trust. Each Certificate in a series will represent a
fractional undivided interest in the related Trust and will have no rights,
benefits or interest in respect of any other Trust. The property of each Trust
will include equipment notes (the "Equipment Notes") (a) issued, with recourse
to Southwest, by Southwest to finance all or a portion of the equipment cost
of, or to purchase all or a portion of the outstanding debt with respect to,
aircraft, including engines, which have been or will be purchased by Southwest
(each, an "Owned Aircraft") or (b) issued on a nonrecourse basis by one or more
owner trustees pursuant to separate leveraged lease transactions to finance or
refinance a portion of the equipment cost of, aircraft, including engines,
which have been or will be leased to Southwest (each, a "Leased Aircraft" and
together with the Owned Aircraft, the "Aircraft"). The Prospectus Supplement
relating to each offering of Certificates will describe certain terms of the
Certificates being offered, the Trust or Trusts relating thereto, the Equipment
Notes to be purchased by such Trust or Trusts, the Aircraft relating to such
Equipment Notes and the leveraged lease transactions, if any, relating thereto.

The Equipment Notes issued in respect of the Leased Aircraft will not
be direct obligations of, or guaranteed by, Southwest, but the amounts
unconditionally payable by Southwest for the lease of such Aircraft will be
sufficient to pay in full when due all payments required to be made on such
Equipment Notes. The Equipment Notes issued in respect of the Owned Aircraft
will be direct obligations of Southwest.

Equipment Notes may be issued in respect of an Aircraft in one or more
series, each series having a different interest rate and final maturity date. A
separate Trust will purchase one or more series of the Equipment Notes issued
with respect to each of one or more Aircraft. All of the Equipment Notes held
in such Trust will have an interest rate equal to the interest rate applicable
to the Certificates issued by such Trust and maturity dates occurring on or
before the final distribution date applicable to such Certificates. The
Equipment Notes issued with respect to each Aircraft will be secured by a
security interest in such Aircraft and, in the case of the Leased Aircraft, in
the lease relating thereto, including the right to receive rentals payable in
respect of such Aircraft by Southwest.

Interest paid on the Equipment Notes held in each Trust will be passed
through to the holders of the Certificates relating to such Trust on the dates
and at the rate per annum set forth in the Prospectus Supplement relating to
such Certificates until the final distribution date for such Trust. Principal
paid on the Equipment Notes held in each Trust will be passed through to the
holders of the Certificates relating to such Trust in scheduled amounts on the
dates set forth in the Prospectus Supplement relating to such Certificates
until the final distribution date for such Trust.
_________________________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

________________________________

The Certificates may be sold to or through underwriters, through
dealers or agents or directly to purchasers. See "Plan of Distribution." The
accompanying Prospectus Supplement sets forth the names of any underwriters,
dealers or agents involved in the sale of the Certificates in respect of which
this Prospectus is being delivered and any applicable fee, commission or
discount arrangements with them. See "Plan of Distribution" for information
concerning secondary trading of the Certificates.

This Prospectus may not be used to consummate sales of Certificates
unless accompanied by a Prospectus Supplement.

_________________________________

The date of this Prospectus is , 1995.
AVAILABLE INFORMATION

Southwest is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information concerning
Southwest may be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, Room 1024; Citicorp Center, 500 West Madison Street,
Chicago, Illinois 60661-2511; and Seven World Trade Center, New York, New York
10048. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Such material can also be inspected and copied at the offices
of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York
10005.

This Prospectus constitutes a part of two registration statements on
Form S-3 filed by Southwest with the Commission under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus does not contain all
of the information included in the Registration Statements, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Reference is made to such Registration Statements and to the
exhibits relating thereto for further information with respect to Southwest and
the securities offered hereby.

REPORTS TO CERTIFICATEHOLDERS BY THE TRUSTEE

Wilmington Trust Company, as Trustee for the holders of the
Certificates, will provide to such holders certain periodic statements
concerning distributions made with respect to each Trust. See "Description of
the Certificates -- Statements to Certificateholders."

DOCUMENTS INCORPORATED BY REFERENCE

The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 heretofore filed with the Commission, is incorporated by
reference herein and made a part hereof.

In addition, all documents filed by Southwest pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of, or deregistration
of, the Certificates offered hereby shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified and superseded, to constitute a part of this Prospectus.

Southwest will provide without charge to each person to whom this
Prospectus is delivered, upon the request of such person, a copy of any or all
of the documents relating to Southwest incorporated herein by reference (other
than exhibits unless such exhibits are specifically incorporated by reference
into such documents). Written requests for such documents should be directed
to: Southwest Airlines Co., P. O. Box 36611, Dallas, Texas 75235, Attention:
John D. Owen, Treasurer (Telephone: 214/904-4334).

GLOSSARY

Included at the end of this Prospectus as Appendix I is a Glossary of
certain of the significant defined terms used herein.
THE COMPANY

Southwest is a major domestic airline which provides single class air
transportation characterized by frequent, high quality service at affordable
prices. Southwest primarily services short-haul city pairs, targeting the
business commuter as well as leisure travelers.

The Company was incorporated in Texas in 1967. Southwest's principal
executive offices are located at 2702 Love Field Drive, Dallas, Texas 75235.
The Company's mailing address is P.O. Box 36611, Love Field, Dallas, Texas
75235, where its telephone number is 214/904-4000.

RATIOS OF EARNINGS TO FIXED CHARGES

The ratios of earnings to fixed charges have been computed using
earnings which are the sum of net income, income taxes and fixed charges
adjusted to exclude interest capitalized during the period. Fixed charges are
interest, whether expensed or capitalized, amortization of debt discount and
expense and that portion of rental charges estimated to be representative of an
interest factor.

A statement setting forth the calculation of the ratios of earnings to
fixed charges is filed as an exhibit to the Registration Statement of which
this Prospectus is a part.

FORMATION OF THE TRUSTS

In respect of each offering of Certificates, one or more Trusts will
be formed, and the related Certificates will be issued, pursuant to separate
Trust Supplements to be entered into between the Trustee and Southwest in
accordance with the terms of the Basic Agreement. All Certificates with respect
to each Trust will represent fractional undivided interests in such Trust and
the property held in such Trust, and will have no rights, benefits or interest
in respect of any other Trust or the property held therein. Concurrently with
the execution and delivery of each Trust Supplement, the Trustee, on behalf of
the Trust formed thereby, will enter into one or more financing, refinancing or
purchase agreements (each such agreement being herein referred to as a "Note
Purchase Agreement") relating to one or more Aircraft described in the
applicable Prospectus Supplement. Pursuant to the applicable Note Purchase
Agreement or Note Purchase Agreements, the Trustee, on behalf of such Trust,
will purchase the Equipment Notes issued with respect to such Aircraft so that
all of the Equipment Notes held in such Trust will have an interest rate equal
to the interest rate applicable to the Certificates issued by such Trust. The
maturity dates of the Equipment Notes acquired by each Trust will occur on or
before the final distribution date applicable to the Certificates issued with
respect to such Trust. The Trustee will distribute the amount of payments of
principal, premium, if any, and interest received by it as holder of the
Equipment Notes to the Certificateholders of the Certificates with respect to
the Trust in which such Equipment Notes are held. See "Description of the
Certificates" and "Description of the Equipment Notes."

3

USE OF PROCEEDS

As more fully described in the applicable Prospectus Supplement, the
Certificates will be issued in order to facilitate the financing of all or a
portion of the equipment cost of Owned Aircraft described in such Prospectus
Supplement or the financing or refinancing of all or a portion of the debt
component of one or more separate leveraged lease transactions entered into by
Southwest, as lessee, with respect to Leased Aircraft described therein. The
proceeds from the sale of such Certificates will be used by the Trustee on
behalf of the applicable Trust or Trusts to purchase, at par, the Owned
Aircraft Notes issued by Southwest to finance all or a portion of the equipment
cost of Owned Aircraft purchased or to be purchased by Southwest or Leased
Aircraft Notes issued by the respective Owner Trustee or Owner Trustees to
finance or refinance all or a portion of the equipment cost of such Leased
Aircraft. Simultaneously with the acquisition of each such Leased Aircraft, the
respective Owner Trustee leased or will lease such Leased Aircraft to
Southwest. Any portion of the proceeds from the sale of Certificates not used
by the Trustee to purchase Equipment Notes on or prior to the date specified
therefor in the applicable Prospectus Supplement will be distributed on a
Special Distribution Date to the applicable Certificateholders, together with
interest, but without premium. See "Description of the Certificates -- Special
Distribution Upon Unavailability of Aircraft."

The Equipment Notes with respect to each Aircraft will be issued under
a separate Trust Indenture and Security Agreement (each, an "Indenture")
between a bank or trust company as trustee thereunder (each, a "Loan Trustee")
and (a) with respect to the Owned Aircraft, Southwest or (b) with respect to
the Leased Aircraft, an owner trustee, not in its individual capacity (except
as expressly set forth therein) but solely as trustee (each, an "Owner
Trustee"), of a separate trust for the benefit of one or more institutional or
corporate investors (each, an "Owner Participant"). In the case of Leased
Aircraft, each Owner Participant will provide, from sources other than the
Equipment Notes, at least 20% of the equipment cost of the related Aircraft. No
Owner Participant, however, will be personally liable for any amount payable
under the related Indenture or the Leased Aircraft Notes issued thereunder.

DESCRIPTION OF THE CERTIFICATES

In connection with each offering of Certificates, one or more separate
trusts will be formed, and one or more series of Certificates will be issued,
pursuant to the Basic Agreement and one or more separate Trust Supplements to
be entered into between Southwest and the Trustee. The following summary
relates to the Basic Agreement and each of the Trust Supplements, the Trusts to
be formed thereby and the Certificates to be issued by each Trust except to the
extent, if any, described in the applicable Prospectus Supplement. Citations to
the relevant sections of the Basic Agreement appear below in parentheses unless
otherwise indicated. The statements under this caption are a summary and do not
purport to be complete. The summary makes use of terms defined in and is
qualified in its entirety by reference to all of the provisions of the Basic
Agreement, the form of which has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Trust Supplement relating to
each series of Certificates and the forms of the Leases, if any, Note Purchase
Agreements and Indentures relating thereto will be filed as exhibits to a
report by Southwest on Form 8-K, 10-Q, or 10-K, as applicable, to be filed with
the Commission following the issuance of such series of Certificates.

4
GENERAL

Each Certificate will represent a fractional undivided interest in the
separate Trust created by the Trust Supplement pursuant to which such
Certificate is issued. The property of each Trust will include the Equipment
Notes held in such Trust, all monies at any time paid thereon and all monies
due and to become due thereunder and funds from time to time deposited with the
Trustee in accounts relating to such Trust. Each Certificate will represent a
pro rata share of the outstanding principal amount of the Equipment Notes and
other property held in the related Trust and will be issued in minimum
denominations of $1,000 or any integral multiple of $1,000. (Sections 2.01 and
3.01)

Except as otherwise provided in the applicable Trust Supplement,
Certificates will be registered in the name of Cede & Co. ("Cede") as the
nominee of The Depository Trust Company ("DTC") and no person acquiring an
interest in Certificates ("Certificate Owner") will be entitled to receive a
certificate representing such person's interest in the related Trust unless
"Definitive Certificates" are issued as described below. Unless Definitive
Certificates are issued, all references to actions by Certificateholders shall
refer to actions taken by DTC upon instructions from DTC Participants (as
defined below), and all references herein to distributions, notices, reports
and statements to Certificateholders shall refer, as the case may be, to
distributions, notices, reports and statements to DTC or Cede, as the
registered holder of the Certificates, or to DTC Participants for distribution
to Certificate Owners in accordance with DTC procedures. See "Description of
the Certificates -- Book-Entry Registration." (Section 3.09)

Interest will be passed through to Certificateholders of each Trust at
the rate per annum set forth on the cover page of the applicable Prospectus
Supplement and will be calculated on the basis of a 360-day year of twelve 30-
day months.

The Certificates of each series represent interests only in the
related Trust and all payments and distributions shall be made only from the
related Trust Property. (Section 3.08) The Certificates do not represent an
interest in or obligation of Southwest, the Trustee, any of the Loan Trustees
or Owner Trustees in their individual capacities, any Owner Participant, or any
affiliate of any thereof.

The Basic Agreement does not and, except as otherwise described in the
applicable Prospectus Supplement, the Indentures will not, include financial
covenants or "event risk" provisions specifically designed to afford
Certificateholders protection in the event of a highly leveraged transaction
affecting Southwest. However, the Certificateholders of each series will have
the benefit of a lien on the specific Aircraft securing the related Equipment
Notes held in the related Trust, as discussed under the caption "Description of
the Equipment Notes -- Security."

BOOK-ENTRY REGISTRATION

The Certificates of each Trust will be issued in fully registered form
only and, except as otherwise described in the applicable Prospectus
Supplement, Certificates will be subject to the provisions described under this
caption for book-entry registration with DTC.

DTC has advised Southwest that it is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to Section
17A of the Exchange Act. DTC was created to hold securities for its
participants ("DTC Participants") and to facilitate the clearance and
settlement of securities transactions between DTC

5
Participants through electronic book-entries, thereby eliminating the need for
physical movement of certificates. DTC Participants include securities brokers
and dealers, banks, trust companies and clearing corporations. Indirect access
to the DTC system also is available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship
with a DTC Participant either directly or indirectly ("Indirect Participants").

Certificate Owners that are not DTC Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of,
or other interests in, Certificates may do so only through DTC Participants and
Indirect Participants. In addition, Certificate Owners will receive all
distributions of principal and interest from the Trustee through DTC
Participants or Indirect Participants, as the case may be. Under a book-entry
format, Certificate Owners may experience some delay in their receipt of
payments, since such payments will be forwarded by the Trustee to Cede, as
nominee for DTC. DTC will forward such payments to DTC Participants, which
thereafter will forward them to Indirect Participants or Certificate Owners, as
the case may be, in accordance with customary industry practices. The
forwarding of such distributions to the Certificate Owners will be the
responsibility of such DTC Participants. The only "Certificateholder" will be
Cede, as nominee of DTC. Certificate Owners will not be recognized by the
Trustee as Certificateholders, as such term is used in the Basic Agreement, and
Certificate Owners will be permitted to exercise the rights of
Certificateholders only indirectly through DTC and DTC Participants.

Under the rules, regulations and procedures creating and affecting DTC
and its operations (the "Rules"), DTC is required to make book-entry transfers
of Certificates among DTC Participants on whose behalf it acts with respect to
the Certificates and to receive and transmit distributions of principal of,
premium, if any, and interest on the Certificates. DTC Participants and
Indirect Participants with which Certificate Owners have accounts with respect
to the Certificates similarly are required to make book-entry transfers and
receive and transmit such payments on behalf of their respective Certificate
Owners. Accordingly, although Certificate Owners will not possess Certificates,
the Rules provide a mechanism by which Certificate Owners will receive payments
and will be able to transfer their interests.

Because DTC can only act on behalf of DTC Participants, who in turn
act on behalf of Indirect Participants, the ability of a Certificate Owner to
pledge Certificates to persons or entities that do not participate in the DTC
system, or to otherwise act with respect to such Certificates, may be limited
due to the lack of a physical certificate for such Certificates.

DTC has advised Southwest that it will take any action permitted to be
taken by Certificateholders only at the direction of one or more DTC
Participants to whose accounts with DTC the Certificates are credited.
Additionally, DTC has advised Southwest that it will take such actions with
respect to any percentage of the beneficial interest of Certificateholders held
in each Trust only at the direction of and on behalf of DTC Participants whose
holders include undivided interests that satisfy any such percentage. DTC may
take conflicting actions with respect to other undivided interests to the
extent that such actions are taken on behalf of DTC Participants whose holders
include such undivided interests.

Neither Southwest nor the Trustee will have any liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interest of the Certificate held by Cede, as nominee for DTC, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.

6
DEFINITIVE CERTIFICATES

With respect to each Trust, the related Certificates will be issued in
fully registered, certificated form ("Definitive Certificates") to Certificate
Owners or their nominees, rather than to DTC or its nominee, only if (i)
Southwest advises the Trustee in writing that DTC is no longer willing or able
to discharge properly its responsibilities as depository with respect to such
Certificates and Southwest is unable to locate a qualified successor, (ii)
Southwest, at its option, elects to terminate the book-entry system through DTC
or (iii) after the occurrence of an Event of Default, Certificate Owners
representing an aggregate percentage interest in such Trust of not less than a
majority advise the Trustee, Southwest and DTC through DTC Participants in
writing that the continuation of a book-entry system through DTC (or a
successor thereto) is no longer in the Certificate Owners' best interest.
(Section 3.09)

Upon the occurrence of any event described in the immediately
preceding paragraph, the Trustee will be required to notify all affected
Certificate Owners through DTC Participants of the availability of Definitive
Certificates. Upon surrender by DTC of the Certificates and receipt of
instructions for reregistration, the Trustee will reissue the Certificates as
Definitive Certificates to Certificate Owners. (Section 3.09)

Distributions of principal of, premium, if any, and interest on the
Certificates will thereafter be made by the Trustee in accordance with the
procedures set forth in the Basic Agreement and the applicable Trust
Supplements, directly to holders of Definitive Certificates in whose names such
Definitive Certificates were registered at the close of business on the Record
Date. Such distributions will be made by check mailed to the address of each
such holder as it appears on the register maintained with respect to the
applicable Trust. The final payment on any Certificate, however, will be made
only upon presentation and surrender of such Certificate at the office or
agency specified in the notice of final distribution to Certificateholders.
(Sections 4.02 and 11.01)

Definitive Certificates will be freely transferable and exchangeable
at the office of the Trustee upon compliance with the requirements set forth in
the Basic Agreement and the applicable Trust Supplements. No service charge
will be imposed for any registration of transfer or exchange, but payment of a
sum sufficient to cover any tax or other governmental charge will be required.
(Section 3.04)

All payments made by Southwest to the Loan Trustees under the Leases
or Owned Aircraft Notes, as the case may be, will be in immediately available
funds and will be passed through to DTC in immediately available funds.

Secondary trading in long-term notes and debentures of corporate
issuers is generally settled in clearing-house or next-day funds. In contrast,
the Certificates will trade in DTC's Same Day Funds Settlement System until
maturity, and secondary market trading activity in the Certificates will
therefore be required by DTC to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Certificates.

PAYMENTS AND DISTRIBUTIONS

Payments of principal of, premium, if any, and interest on the
Equipment Notes held in each Trust received by the Trustee will be distributed
by the Trustee to the Certificateholders of such Trust on the date such receipt
is confirmed, except in certain cases when some or all of such Equipment Notes

7
are in default. See "Description of the Certificates -- Events of Default and
Certain Rights Upon an Event of Default".

Payments of principal of, and interest on the unpaid principal amount
of, the Equipment Notes held in each Trust will be scheduled to be received by
the Trustee on the dates specified in the applicable Prospectus Supplement
(such scheduled payments of principal of, and interest on, the Equipment Notes
are herein referred to as "Scheduled Payments," and the dates specified
therefor in the applicable Prospectus Supplement are herein referred to as
"Regular Distribution Dates"). Each Certificateholder of each Trust will be
entitled to receive a pro rata share of any distribution in respect of
Scheduled Payments of principal and interest made on the Equipment Notes held
in such Trust.

Payments of principal, premium, if any, and interest received by the
Trustee on account of the early redemption, if any, of the Equipment Notes
relating to one or more Aircraft held in a Trust, and payments received by the
Trustee following a default in respect of the Equipment Notes relating to one
or more Aircraft held in a Trust ("Special Payments") will be distributed on
the dates determined pursuant to the applicable Prospectus Supplement (a
"Special Distribution Date"). The Trustee will mail notice to the
Certificateholders of record of any Trust not less than 20 days prior to the
Special Distribution Date on which any Special Payment is scheduled to be
distributed by the Trustee stating such anticipated Special Distribution Date.
(Section 4.02)

POOL FACTORS

Unless there has been an early redemption or purchase, or a default in
the payment of principal or interest, in respect of one or more issues of the
Equipment Notes held in a Trust, as described in the applicable Prospectus
Supplement or below in "Description of the Certificates -- Events of Default
and Certain Rights Upon an Event of Default", the Pool Factor for such Trusts
will decline in proportion to the scheduled repayments of principal on the
Equipment Notes held in such Trust as described in the applicable Prospectus
Supplement. In the event of such redemption, purchase or default, the Pool
Factor and the Pool Balance of each Trust so affected will be recomputed after
giving effect thereto and notice thereof will be mailed to Certificateholders
of such Trust. Each Trust will have a separate Pool Factor.

The Pool Factor for each Trust will initially be 1.0000000;
thereafter, the Pool Factor for each Trust will decline as described above to
reflect reductions in the Pool Balance of such Trust. The amount of a
Certificateholder's pro rata share of the Pool Balance of a Trust can be
determined by multiplying the original denomination of the Certificateholder's
Certificate of such Trust by the Pool Factor for such Trust as of the
applicable Regular Distribution Date or Special Distribution Date. The Pool
Factor and the Pool Balance for each Trust will be mailed to Certificateholders
of record of such Trust on each Regular Distribution Date and Special
Distribution Date. (Section 4.03(a))

STATEMENTS TO CERTIFICATEHOLDERS

On each Regular Distribution Date and Special Distribution Date, the
Trustee will include with each distribution of a Scheduled Payment or Special
Payment to Certificateholders of record of the related Trust a statement,
giving effect to such distribution to be made on such Regular Distribution Date
or Special Distribution Date, setting forth the following information (per
$1,000 in aggregate principal amount of Certificates for such Trust, as to (i)
and (ii) below):

8
(i) the amount of such distribution allocable to principal and the
amount allocable to premium, if any;

(ii) the amount of such distribution allocable to interest; and

(iii) the Pool Balance and the Pool Factor for such Trust. (Section
4.03(a))

So long as the Certificates are registered in the name of Cede, as
nominee for DTC, on the Record Date prior to each Regular Distribution Date and
Special Distribution Date, the Trustee will request from DTC a Securities
Position Listing setting forth the names of all DTC Participants reflected on
DTC's books as holding interests in the Certificates of such Trust on such
Record Date. On each Regular Distribution Date and Special Distribution Date,
the Trustee will mail to each such DTC Participant the statement described
above, and will make available additional copies as requested by such DTC
Participant, to be available for forwarding to Certificate Owners. (Sections
3.09 and 4.03(a))

In addition, after the end of each calendar year, the Trustee will
prepare for each Certificateholder of record of each Trust at any time during
the preceding calendar year a report containing the sum of the amounts
determined pursuant to clauses (i) and (ii) above with respect to the Trust for
such calendar year or, in the event such person was a Certificateholder of
record during a portion of such calendar year for the applicable portion of
such calendar year, and such other items as are readily available to the
Trustee and which a Certificateholder shall reasonably request as necessary for
the purpose of such Certificateholder's preparation of its federal income tax
returns. (Section 4.03(b)) Such report and such other items shall be prepared
on the basis of information supplied to the Trustee by the DTC Participants,
and shall be delivered by the Trustee to such DTC Participants to be available
for forwarding by such DTC Participants to Certificate Owners in the manner
described above.

At such time, if any, as the Certificates are issued in the form of
Definitive Certificates, the Trustee will prepare and deliver the information
described above to each Certificateholder of record of such Trust as the name
and period of record ownership of such Certificateholder appears on the records
of the registrar of the Certificates. (Sections 3.09 and 4.03)

VOTING OF EQUIPMENT NOTES

The Trustee, as holder of the Equipment Notes held in each Trust, has
the right to vote and give consents and waivers in respect of such Equipment
Notes under the related Indentures. The Basic Agreement sets forth the
circumstances in which the Trustee shall direct any action or cast any vote as
the holder of the Equipment Notes held in the applicable Trust at its own
discretion and the circumstances in which the Trustee shall seek instructions
from the Certificateholders of such Trust. Prior to an Event of Default (as
defined below) with respect to any Trust, the principal amount of the Equipment
Notes held in such Trust directing any action or being voted for or against any
proposal shall be in proportion to the principal amount of Certificates held by
the Certificateholders of such Trust taking the corresponding position.
(Sections 6.01 and 10.01)

EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT

The Basic Agreement defines an event of default with respect to a
Trust (an "Event of Default") as the occurrence and continuance of an event of
default under one or more of the related Indentures (an "Indenture Default").
(Section 6.01) The Indenture Defaults under an Indenture will be described in
the

9
applicable Prospectus Supplement and in the case of Leased Aircraft Notes, will
include events of default under the related Lease. Since the Equipment Notes
issued under an Indenture may be held in more than one Trust, a continuing
Indenture Default under such Indenture would result in an Event of Default with
respect to each such Trust. There will be, however, no cross-default provisions
in the Indentures and events resulting in an Indenture Default under any
particular Indenture will not necessarily result in an Indenture Default
occurring under any other Indenture. If an Indenture Default occurs in fewer
than all of the Indentures related to a Trust, the Equipment Notes issued
pursuant to the related Indentures with respect to which an Indenture Default
has not occurred will continue to be held in such Trust and payments of
principal and interest on such Equipment Notes will continue to be distributed
to the holders of the Certificates of such Trust as originally scheduled as
therein provided.

In the case of Leased Aircraft, the Owner Trustee and the Owner
Participant under each Indenture each will have the right under certain
circumstances to cure an Indenture Default that results from the occurrence of
a Lease Event of Default under the related Lease. If the Owner Trustee or the
Owner Participant chooses to exercise such cure right, the Indenture Default
and consequently the Event of Default with respect to the related Trust or
Trusts will be deemed to have been cured.

The Basic Agreement provides that, as long as an Indenture Default
under any Indenture relating to Equipment Notes held in a Trust shall have
occurred and be continuing, the Trustee of such Trust may vote all of the
Equipment Notes issued under such Indenture that are held in such Trust, and
upon the direction of the holders of Certificates evidencing fractional
undivided interests aggregating not less than a majority in interest of such
Trust shall vote not less than a corresponding majority of such Equipment
Notes, in favor of directing the related Loan Trustee to declare the unpaid
principal amount of all Equipment Notes then outstanding under such Indenture
and any accrued and unpaid interest thereon to be due and payable. The Basic
Agreement also provides that, if an Indenture Default under any Indenture
relating to Equipment Notes held in a Trust shall have occurred and be
continuing, the Trustee of such Trust may, and upon the direction of the
holders of Certificates evidencing fractional undivided interests aggregating
not less than a majority in interest of such Trust shall, vote all of the
Equipment Notes issued under such Indenture that are held in such Trust in
favor of directing the related Loan Trustee as to the time, method and place of
conducting any proceeding for any remedy available to such Loan Trustee or of
exercising any trust or power conferred on such Loan Trustee under such
Indenture. (Sections 6.01 and 6.04)

The ability of the holders of the Certificates issued with respect to
any one Trust to cause the Loan Trustee with respect to any Equipment Notes
held in such Trust to accelerate the payment on such Equipment Notes under the
related Indenture or to direct the exercise of remedies by such Loan Trustee
under the related Indenture will depend, in part, upon the proportion between
the aggregate principal amount of the Equipment Notes outstanding under such
Indenture and held in such Trust and the aggregate principal amount of all
Equipment Notes outstanding under such Indenture. Each Trust will hold
Equipment Notes with different terms from those of the Equipment Notes held in
the other Trusts and therefore the Certificateholders of a Trust may have
divergent or conflicting interests from those of the Certificateholders of the
other Trusts holding Equipment Notes relating to the same Aircraft. In
addition, so long as the same institution acts as Trustee of each Trust, in the
absence of instructions from the Certificateholders of any such Trust, the
Trustee for such Trust could for the same reason be faced with a potential
conflict of interest upon an Indenture Default. In such event, the Trustee has
indicated that it would resign as trustee of one or all such Trusts, and a
successor trustee would be appointed in accordance with the terms of the Basic
Agreement.

10
As an additional remedy, if an Indenture Default under an Indenture
shall have occurred and be continuing, the Basic Agreement provides that the
Trustee of a Trust holding Equipment Notes issued under such Indenture may, and
upon the direction of the holders of Certificates evidencing fractional
undivided interests aggregating not less than a majority in interest of such
Trust shall, sell all or part of such Equipment Notes for cash to any Person.
(Sections 6.01 and 6.02) Any proceeds received by the Trustee upon any such
sale shall be deposited in the Special Payments Account for such Trust and
shall be distributed to the Certificateholders of such Trust on a Special
Distribution Date. (Sections 4.01 and 4.02) The market for Equipment Notes in
default may be very limited and there can be no assurance that they could be
sold for a reasonable price. Furthermore, so long as the same institution acts
as Trustee of each Trust, it may be faced with a conflict in deciding from
which Trust to sell Equipment Notes to available buyers. If the Trustee sells
any such Equipment Notes with respect to which an Indenture Default exists for
less than their outstanding principal amount, the Certificateholders of such
Trust will receive a smaller amount of principal distributions than anticipated
and will not have any claim for the shortfall against Southwest, the related
Owner Trustee in the case of any Leased Aircraft or the Trustee. Neither the
Trustee nor the Certificateholders of such Trust, furthermore, could take any
action with respect to any remaining Equipment Notes held in such Trust so long
as no Indenture Defaults existed with respect thereto.

Any amount distributed to the Trustee of any Trust by the Loan Trustee
under any Indenture on account of the Equipment Notes held in such Trust
following an Indenture Default under such Indenture shall be deposited in the
Special Payments Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date. In addition,
if, following an Indenture Default under any Indenture relating to Leased
Aircraft, the related Owner Trustee exercises its option, if any, to redeem or
purchase the outstanding Leased Aircraft Notes issued under such Indenture as
described in the related Prospectus Supplement, the price paid by such Owner
Trustee to the Trustee of any Trust for the Leased Aircraft Notes issued under
such Indenture and held in such Trust shall be deposited in the Special
Payments Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date. (Sections
4.01, 4.02 and 6.02)

Any funds representing payments received with respect to any Equipment
Notes held in a Trust in default, or the proceeds from the sale by the Trustee
of any such Equipment Notes, held by the Trustee in the Special Payments
Account for such Trust shall, to the extent practicable, be invested and
reinvested by the Trustee in Permitted Investments pending the distribution of
such funds on a Special Distribution Date. Permitted Investments are defined as
obligations of the United States or agencies or instrumentalities thereof, the
payment of which is backed by the full faith and credit of the United States
and which mature in not more than 60 days or such lesser time as is required
for the distribution of any such funds on a Special Distribution Date.
(Sections 1.01 and 4.04)

The Basic Agreement provides that the Trustee of each Trust shall,
within 90 days after the occurrence of a default in respect of such Trust, give
to the Certificateholders of such Trust notice, transmitted by mail, of all
uncured or unwaived defaults with respect to such Trust known to it; provided
that, except in the case of default in the payment of principal of, premium, if
any, or interest on any of the Equipment Notes held in such Trust, the Trustee
shall be protected in withholding such notice if it in good faith determines
that the withholding of such notice is in the interests of such
Certificateholders. (Section 7.01)

The Basic Agreement contains a provision entitling the Trustee of each
Trust, subject to the duty of the Trustee during a default to act with the
required standard of care, to be indemnified by the holders

11
of the Certificates of such Trust before proceeding to exercise any right or
power under such Agreement at the request of such Certificateholders. (Section
7.02)

In certain cases, the holders of Certificates of a Trust evidencing
fractional undivided interests aggregating not less than a majority in interest
of such Trust may on behalf of the holders of all Certificates of such Trust
waive, or may instruct the Loan Trustee to waive, any past default or Event of
Default with respect to such Trust and thereby annul any direction given by
such holders to the related Loan Trustee with respect thereto, except (i) a
default in the deposit of any Scheduled Payment or Special Payment or in the
distribution thereof; (ii) a default in payment of the principal of, premium,
if any, or interest on any of the Equipment Notes held in such Trust and (iii)
a default in respect of any covenant or provision of the Basic Agreement or the
related Trust Supplement that cannot be modified or amended without the consent
of each Certificateholder of such Trust affected thereby. (Section 6.05) Each
Indenture will provide that, with certain exceptions, the holders of a majority
in aggregate unpaid principal amount of the Equipment Notes issued thereunder
may on behalf of all such holders waive any past default or Indenture Default
thereunder. In the event of a waiver with respect to a Trust as described
above, the principal amount of the Equipment Notes issued under the related
Indenture held in such Trust shall be counted as waived in the determination of
the majority in aggregate unpaid principal amount of Equipment Notes required
to waive a default or an Indenture Default under such Indenture. Therefore, if
the Certificateholders of a Trust or Trusts waive a past default or Event of
Default such that the principal amount of the Equipment Notes held either
individually in such Trust or in the aggregate in such Trusts constitutes the
required majority in aggregate unpaid principal amount under the applicable
Indenture, such past default or Indenture Default under such Indenture shall be
waived.

MODIFICATIONS OF THE AGREEMENTS

The Basic Agreement contains provisions permitting Southwest and the
Trustee of each Trust to enter into a supplemental agreement, without the
consent of the holders of any of the Certificates of such Trust, (i) to provide
for the formation of such Trust and the issuance of a series of Certificates,
(ii) to evidence the succession of another corporation to Southwest and the
assumption by such corporation of Southwest's obligations under the Basic
Agreement and the applicable Trust Supplement, (iii) to add to the covenants of
Southwest for the benefit of the holders of such Certificates, or to surrender
any right or power in the Basic Agreement conferred upon Southwest, (iv) to
correct or supplement any defective or inconsistent provision of the Basic
Agreement, the applicable Trust Supplement or any supplemental trust agreement,
or to make any other provisions with respect to matters or questions arising
thereunder, provided such action shall not adversely affect the interest of the
holders of such Certificates, or to cure any ambiguity or correct any mistake,
(v) to modify, eliminate or add to the provisions of the Basic Agreement to the
extent as shall be necessary to continue the qualification of the Basic
Agreement (including any supplemental agreement) under the Trust Indenture Act,
(vi) to provide for a successor Trustee or to add to or change any provision of
the Basic Agreement as shall be necessary to facilitate the administration of
the Trusts thereunder by more than one Trustee, or (vii) to make any other
amendments or modifications which shall only apply to Certificates of one or
more series to be issued thereafter. (Section 9.01)

The Basic Agreement also contains provisions permitting Southwest and
the Trustee of each Trust, with the consent of the Certificateholders of such
Trust evidencing fractional undivided interests aggregating not less than a
majority in interest of such Trust, to execute supplemental agreements adding
any provisions to or changing or eliminating any of the provisions of the Basic
Agreement, to the extent relating to such Trust, and the applicable Trust
Supplement, or modifying the rights of such

12
Certificateholders, except that no such supplemental agreement may, without the
consent of the holder of each such Certificate so affected, (a) reduce in any
manner the amount of, or delay the timing of, any receipt by the Trustee of
payments on the Equipment Notes held in such Trust, or distributions in respect
of any Certificate of such Trust, or make distributions payable in coin or
currency other than that provided for in such Certificates, or impair the right
of any Certificateholder of such Trust to institute suit for the enforcement of
any such payment when due, (b) permit the disposition of any Equipment Note
held in such Trust, except as provided in the Basic Agreement or the applicable
Trust Supplement, or otherwise deprive such Certificateholder of the benefit of
the ownership of the Equipment Notes held in such Trust, (c) reduce the
percentage of the aggregate fractional undivided interests of the Trust
provided for in the Basic Agreement or the applicable Trust Supplement, the
consent of the holders of which is required for any such supplemental agreement
or for any waiver provided for in the Basic Agreement or such Trust Supplement,
or (d) modify certain specified provisions of the Basic Agreement except to
increase such percentage or to provide that certain other provisions cannot be
modified or waived without the consent of the holders of the Certificates
affected. (Section 9.02)

MODIFICATION OF INDENTURE AND RELATED AGREEMENTS

In the event that the Trustee, as the holder of any Equipment Notes
held in a Trust, receives a request for its consent to any amendment,
modification or waiver under the Indenture, Lease, if any, or other document
relating to such Equipment Notes, the Trustee shall mail a notice of such
proposed amendment, modification or waiver to each Certificateholder of such
Trust as of the date of such notice. The Trustee shall request instructions
from the Certificateholders of such Trust as to whether or not to consent to
such amendment, modification or waiver. The Trustee shall vote or consent with
respect to such Equipment Notes in such Trust in the same proportion as the
Certificates of such Trust were actually voted by the holders thereof by a
certain date. Notwithstanding the foregoing, if an Event of Default in respect
of such Trust shall have occurred and be continuing, the Trustee may, in the
absence of instructions from Certificateholders holding a majority in interest
of such Trust, in its own discretion consent to such amendment, modification or
waiver, and may so notify the relevant Loan Trustee. (Section 10.01)

TERMINATION OF THE TRUSTS

The obligations of Southwest and the Trustee with respect to a Trust
will terminate upon the distribution to Certificateholders of such Trust of all
amounts required to be distributed to them pursuant to the Basic Agreement and
the applicable Trust Supplement and the disposition of all property held in
such Trust. The Trustee will mail to each Certificateholder of record of such
Trust notice of the termination of such Trust, the amount of the proposed final
payment and the proposed date for the distribution of such final payment for
such Trust. The final distribution to any Certificateholder of such Trust will
be made only upon surrender of such Certificateholder's Certificates at the
office or agency of the Trustee specified in such notice of termination.
(Section 11.01)

DELAYED PURCHASE

In the event that, on the delivery date of any Certificates, all of
the proceeds from the sale of such Certificates are not used to purchase the
Equipment Notes contemplated to be held in the related Trust, such Equipment
Notes may be purchased by the Trustee at any time on or prior to the date
specified in the applicable Prospectus Supplement. In such event, the Trustee
will hold the proceeds from the sale of such Certificates not used to purchase
Equipment Notes in an escrow account pending the purchase of

13
the Equipment Notes not so purchased. Such proceeds will be invested in certain
Specified Investments at the direction and risk of, and for the account of,
Southwest. Earnings on Specified Investments in the escrow account for each
Trust will be paid to Southwest periodically, and Southwest will be responsible
for any losses. (Section 2.02(b))

On the Regular Distribution Date occurring on the date specified in
the applicable Prospectus Supplement, Southwest will pay to the Trustee an
amount equal to the interest that would have accrued, at the rate specified in
the applicable Prospectus Supplement with respect to such Certificates, had the
Equipment Notes been purchased on the date of the issuance of such Certificates
from the date of such issuance to, but excluding, the date of the purchase of
such Equipment Notes by the Trustee. (Section 2.02(b))

SPECIAL DISTRIBUTION UPON UNAVAILABILITY OF AIRCRAFT

To the extent, due to a casualty to, or other event causing the
unavailability of, one or more Aircraft, that the full amount of the proceeds
from the sale of any Certificates held in the escrow account referred to above
is not used to purchase Equipment Notes on or prior to the date specified in
the applicable Prospectus Supplement, an amount equal to the unused proceeds
will be distributed by the Trustee to the holders of record of such
Certificates on a pro rata basis upon not less than 20 days' prior notice to
them as a Special Distribution on the date specified in the applicable
Prospectus Supplement or on an earlier Special Distribution Date together with
interest thereon at a rate equal to the rate applicable to such Certificates,
but without premium, and Southwest will pay to the Trustee on such date an
amount equal to such interest. (Section 2.02(b))

MERGER, CONSOLIDATION AND TRANSFER OF ASSETS

Southwest will be prohibited from consolidating with or merging into
any other Person or transferring all or substantially all of its assets as an
entirety to any other Person unless, (i) the surviving successor or transferee
Person shall (a) be a Person organized under the laws of the United States or
any State thereof or the District of Columbia, (b) be a "citizen of the United
States" as defined in the Aviation Act, (c) be a United States certificated air
carrier and (d) expressly assume all of the obligations of Southwest contained
in the Basic Agreement, the Note Purchase Agreements and the Indentures and,
with respect to the Leased Aircraft Notes, the Leases and any other operative
documents; (ii) immediately after giving effect to such transaction, no Lease
Default or Lease Event of Default shall have occurred and be continuing with
respect to the Certificates; (iii) Southwest shall have delivered a certificate
and an opinion or opinions of counsel indicating that such transaction, in
effect, complies with such conditions; and (iv) the surviving successor or
transferee corporation shall make such filings and recordings with the Federal
Aviation Administration pursuant to the Aviation Act, as shall be necessary or
desirable to evidence such consolidation, merger, conveyance, transfer or lease
with or to such Person. (Section 5.02)

THE TRUSTEE

Wilmington Trust Company will be the initial Trustee for each of the
Trusts. The Trustee and any of its affiliates may hold Certificates in their
own names. (Section 7.04) With certain exceptions, the Trustee makes no
representations as to the validity or sufficiency of the Basic Agreement, the
Trust Supplements, the Certificates, the Equipment Notes, the Indentures, the
Leases, if any, or other related documents. (Section 7.03) Unless otherwise
specified in a Prospectus Supplement, Wilmington Trust

14
Company will also be the Loan Trustee of the Indentures under which the
Equipment Notes are issued. It also serves as indenture trustee in numerous
other aircraft financing transactions involving Southwest.

The Trustee may resign with respect to any or all of the Trusts at any
time, in which event Southwest will be obligated to appoint a successor
trustee. If the Trustee ceases to be eligible to continue as Trustee with
respect to a Trust or becomes incapable of acting as Trustee or becomes
insolvent, Southwest may remove such Trustee, or any holder of Certificates of
such Trust for at least six months may, on behalf of himself or herself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of such Trustee and the appointment of a successor trustee. Any
resignation or removal of the Trustee with respect to a Trust and appointment
of the successor trustee for such Trust does not become effective until
acceptance of the appointment by the successor trustee. (Section 7.08) Pursuant
to such resignation and successor trustee provisions, it is possible that a
different trustee could be appointed to act as the successor trustee with
respect to each Trust. All references in this Prospectus to the Trustee are to
the trustee acting in such capacity under each of the Trusts and should be read
to take into account the possibility that each of the Trusts could have a
different successor trustee in the event of such a resignation or removal.

The Basic Agreement provides that Southwest will pay the Trustee's
fees and expenses. (Section 7.06)

DESCRIPTION OF THE EQUIPMENT NOTES

The statements under this caption are summaries and do not purport to
be complete. Except as otherwise indicated below or as described in the
applicable Prospectus Supplement, the following summaries will apply to the
Equipment Notes, the Indenture, the Lease, if any, and the Note Purchase
Agreement relating to each Aircraft. Additional provisions with respect to the
Equipment Notes, the Indentures, the Leases, if any, and the Note Purchase
Agreements relating to any particular offering of Certificates will be
described in the applicable Prospectus Supplement.

GENERAL

Each Equipment Note issued under the same Indenture will relate to a
single Aircraft. The Equipment Notes with respect to each Aircraft will be
issued under a separate Indenture between the related Loan Trustee and
Southwest (in the case of Owned Aircraft Notes) or the related Loan Trustee and
the Owner Trustee (in the case of Leased Aircraft Notes) of a trust for the
benefit of the Owner Participant who is the beneficial owner of the related
Aircraft.

Southwest's obligations under each Indenture relating to an Owned
Aircraft and under the related Owned Aircraft Notes will be direct obligations
of Southwest. The Leased Aircraft Notes will be nonrecourse obligations of the
related Owner Trustee. Except in certain circumstances involving Southwest's
purchase of a Leased Aircraft and the assumption of the Leased Aircraft Notes
related thereto, the Leased Aircraft Notes will not be direct obligations of,
or guaranteed by, Southwest; however, Southwest is obligated to make or cause
to be made rental and other payments to the related Owner Trustee under the
Lease of the related Leased Aircraft in amounts that will be at least
sufficient to pay when due all payments required to be made on the Leased
Aircraft Notes issued with respect to such Leased Aircraft. Southwest's rental
obligations under each Lease will be general obligations of Southwest.

15
PRINCIPAL AND INTEREST PAYMENTS

Interest paid on the Equipment Notes held in each Trust will be passed
through to the Certificateholders of such Trust on the dates and at the rate
per annum set forth in the applicable Prospectus Supplement until the final
distribution date for such Trust. Principal paid on the Equipment Notes held in
each Trust will be passed through to the Certificateholders of such Trust in
scheduled amounts on the dates set forth in the applicable Prospectus
Supplement until the final distribution date for such Trust.

If any date scheduled for any payment of principal of, premium, if
any, or interest on the Equipment Notes is not a Business Day, such payment may
be made on the next succeeding Business Day without any additional interest.

SECURITY

The Leased Aircraft Notes will be secured by (i) an assignment by the
related Owner Trustee to the related Loan Trustee of such Owner Trustee's
rights (except for certain rights, including those described below) under the
Lease with respect to the related Leased Aircraft, including the right to
receive payments of rent thereunder, (ii) a mortgage to such Loan Trustee on
such Aircraft, subject to the rights of Southwest under such Lease, and (iii)
an assignment to such Loan Trustee of certain of such Owner Trustee's rights
under the purchase agreement between Southwest and the related airframe
manufacturer. Unless and until an Indenture Default with respect to a Leased
Aircraft has occurred and is continuing, the Loan Trustee may not exercise the
rights of the Owner Trustee under the related Lease, except the right to
receive payments of rent due thereunder and certain enumerated shared rights.
The assignment by the Owner Trustee to the Loan Trustee of its rights under the
related Lease will exclude certain rights of such Owner Trustee and the related
Owner Participant, including rights to amend, modify or waive, or take actions
with respect to, certain provisions of the related Lease (but only so long as
the same will not impair the value of the trust estate), rights relating to
indemnification by Southwest for certain matters, insurance proceeds payable to
such Owner Trustee in its individual or trust capacity and to such Owner
Participant under liability insurance maintained by Southwest under such Lease
or by any other Person, insurance proceeds payable to such Owner Trustee in its
individual or trust capacity or to such Owner Participant under certain
casualty insurance maintained by such Owner Trustee or such Owner Participant
and certain reimbursement payments made by Southwest to such Owner Participant.

The Owned Aircraft Notes will be secured by a mortgage from Southwest
to the Loan Trustee of the related Owned Aircraft and an assignment by
Southwest to such Loan Trustee of certain of Southwest's rights under the
purchase agreement between Southwest and the related airframe manufacturer.

The Equipment Notes issued under different Indentures will not be
cross-collateralized and consequently the Equipment Notes issued in respect of
any one Aircraft will not be secured by any of the other Aircraft (or any of
the other security related thereto). Southwest will be required to keep each
Aircraft registered under the Aviation Act and to record, or maintain the
recordation of, the Indenture and the Lease, if any, among other documents,
with respect to each Aircraft under the Aviation Act. Such recordation of the
Indenture, the Lease, if any, and other documents with respect to each Aircraft
is intended to give the related Loan Trustee a first priority perfected
security interest in the related Aircraft whenever it is located in the United
States or any of its territories and possessions and, with certain limited
exceptions, in those jurisdictions that have ratified or adhered to the
Convention on the

16
International Recognition of Rights in Aircraft (the "Convention"). However, in
the case of an Indenture Default, the ability of the related Loan Trustee to
realize upon its security interest in an Aircraft could be adversely affected
as a legal or practical matter if such Aircraft were located outside the United
States.

Funds, if any, held from time to time by the Loan Trustee with respect
to any Aircraft, including funds held as the result of an event of loss to such
Aircraft or termination of the Lease, if any, relating thereto, will be
invested and reinvested by such Loan Trustee, at the direction of Southwest
(except in the case of certain Events of Default), in investments described in
the related Indenture or Lease. Southwest will pay the amount of any loss
resulting from any such investment directed by it.

LIMITATION OF LIABILITY

The Owned Aircraft Notes will be direct obligations of Southwest.
Except in certain circumstances involving Southwest's purchase of a Leased
Aircraft and the assumption of the Leased Aircraft Notes related thereto, the
Leased Aircraft Notes will not be direct obligations of, or guaranteed by,
Southwest. None of the Owner Trustees, the Owner Participants or the Loan
Trustees, or any affiliates thereof, shall be personally liable to any holder
of a Leased Aircraft Note or, in the case of the Owner Trustees and the Owner
Participants, to the Loan Trustees for any amounts payable under the Leased
Aircraft Notes or, except as provided in each Indenture, for any liability
under such Indenture. Except in the circumstances described above, all payments
of principal of, premium, if any, and interest on the Equipment Notes issued
with respect to any Aircraft (other than payments made in connection with an
optional redemption or purchase of Leased Aircraft Notes by the related Owner
Trustee or the related Owner Participant or certain payments made by the
related Owner Participant) will be made only from the assets subject to the
lien of the Indenture with respect to such Aircraft or the income and proceeds
received by the related Loan Trustee therefrom (including, in the case of a
Leased Aircraft, rent payable by Southwest under the Lease with respect to such
Leased Aircraft).

Except as otherwise provided in the Indentures, each Owner Trustee in
its individual capacity shall not be answerable or accountable under the
Indentures or under the Leased Aircraft Notes under any circumstances except
for its own wilful misconduct or gross negligence. None of the Owner
Participants will have any duty or responsibility under any of the Indentures
or the Leased Aircraft Notes to the Loan Trustees or to any holder of any
Leased Aircraft Note.

INDENTURE DEFAULTS AND REMEDIES

The applicable Prospectus Supplement will describe the Indenture
Defaults under the related Indentures, the remedies that the Loan Trustee may
exercise with respect to the related Aircraft, either at its own initiative or
upon instruction from holders of the related Equipment Notes, and other
provisions relating to the occurrence of an Indenture Default and the exercise
of remedies. There will be no cross-default provisions in the Indentures and
events resulting in an Indenture Default under any particular Indenture will
not necessarily result in an Indenture Default under any other Indenture.

LEASED AIRCRAFT LEASES

Each Leased Aircraft will be leased separately by the related Owner
Trustee to Southwest pursuant to a "net lease" for a term commencing on the
delivery date thereof to such Owner Trustee and expiring on a date not earlier
than the latest maturity date of the Leased Aircraft Notes issued with respect
to such Leased Aircraft unless previously terminated as permitted by the
related Lease. The basic rent

17
payments by Southwest under each Lease will be payable on the dates specified
in the applicable Prospectus Supplement, and will be assigned by the Owner
Trustee under the related Indenture to provide the funds necessary to make
payments of principal and interest due from such Owner Trustee on the Leased
Aircraft Notes issued under such Indenture. Although in certain cases the basic
rent payments under the Leases may be adjusted, under no circumstances will
rent payments that Southwest will be unconditionally obligated to make or cause
to be made under any Lease be less than the scheduled payments of principal and
interest on the Leased Aircraft Notes issued under the Indenture relating to
such Lease. The balance of any basic rent payments under each Lease, after
payment of the scheduled principal and interest on the Leased Aircraft Notes
issued under the Indenture relating to such Lease, will be paid over to the
related Owner Trustee. Southwest's obligation to pay rent and to cause other
payments to be made under each Lease will be a general obligation of Southwest.
The applicable Prospectus Supplement will describe the Lease Events of Default
under the related Leases, the remedies that the Owner Trustee may exercise with
respect to the related Leased Aircraft, and other provisions relating to the
occurrence of a Lease Event of Default and the exercise of remedies.

COVENANTS RELATING TO AIRCRAFT

Pursuant to the applicable Lease, Southwest will be obligated, at its
expense, to cause each Aircraft to be duly registered, to pay all costs of
operating each Aircraft and to maintain, service and repair each Aircraft so as
to keep each Aircraft in as good operating condition as when delivered to
Southwest, ordinary wear and tear excepted, and in such condition as may be
necessary to enable the airworthiness certification thereof to be maintained in
good standing at all times (other than during temporary periods of grounding)
under the Aviation Act. Southwest will be obligated, at its expense, to replace
all parts (other than severable parts added at the option of Southwest and
parts that Southwest is permitted to remove to the extent described below) that
may from time to time be incorporated or installed in or attached to any
Aircraft and that may become worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair or rendered permanently unfit for use.
Southwest will have the right to make alterations and modifications in and
additions to (including removal of parts which Lessee deems obsolete or no
longer suitable or appropriate for use on the Aircraft from) each Aircraft as
Southwest deems desirable, provided that no such alteration, modification,
addition or removal shall diminish the value or utility of such Aircraft or
impair the condition or airworthiness thereof.

THE NOTE PURCHASE AGREEMENTS

Southwest will be required to indemnify each Loan Trustee and, in the
case of Leased Aircraft, each Owner Participant and Owner Trustee for certain
losses, claims and other matters. In the case of Leased Aircraft, Southwest
will be required under certain circumstances to indemnify each Owner
Participant against the loss of depreciation deductions and certain other
benefits allowable for certain income tax purposes with respect to the related
Leased Aircraft. Each Owner Participant will be required to indemnify the
related Loan Trustee and the holders of the Leased Aircraft Notes issued with
respect to the Leased Aircraft in which such Owner Participant has an interest
for certain losses that may be suffered as a result of its failure to be a
United States citizen or the failure of such Owner Participant to discharge
certain liens or claims on or against the assets subject to the lien of the
related Indenture. Subject to certain restrictions, each Owner Participant may
transfer its interest in the related Leased Aircraft.

18

FEDERAL INCOME TAX CONSEQUENCES

The following is a general discussion by Southwest of the anticipated
material federal income tax consequences of the purchase, ownership and
disposition of Certificates and should be read in conjunction with any
additional discussion of federal income tax consequences included in the
applicable Prospectus Supplement. The discussion is based on laws, regulations,
rulings and decisions in effect as of the date hereof, all of which are subject
to change (possibly on a retroactive basis) or different interpretation. There
can be no assurance that the Internal Revenue Service will not challenge one or
more of the tax consequences described herein, and Southwest does not intend to
seek a ruling from the Service as to any such consequences. The discussion does
not purport to address federal income tax consequences applicable to particular
categories of investors, some of which (for example, insurance companies and
foreign investors) may be subject to special rules. The statements of law and
legal conclusions set forth herein are based upon the opinion of Vinson &
Elkins L.L.P., special counsel to Southwest. Investors should consult their own
tax advisors in determining the federal, state, local and any other tax
consequences to them of the purchase, ownership and disposition of
Certificates, including the advisability of making any election discussed
below. The Trusts are not indemnified for any federal income taxes that may be
imposed upon them, and the imposition of any such taxes on a Trust could result
in a reduction in the amounts available for distribution to the Certificate
Owners of such Trust.

GENERAL

The Trusts should not be classified as associations taxable as
corporations, but, rather, each should be classified as a grantor trust under
subpart E, Part I of Subchapter J of the Internal Revenue Code of 1986, as
amended (the "Code"), and each Certificate Owner should be treated as the owner
of a pro rata undivided interest in each of the Equipment Notes and any other
property held in the related Trust.

Each Certificate Owner must report on its federal income tax return
its pro rata share of the entire income from each of the Equipment Notes and
any other property held in the related Trust, in accordance with such
Certificate Owner's method of accounting. A Certificate Owner using the cash
method of accounting must take into account its pro rata share of income as and
when received by the Trustee. A Certificate Owner using an accrual method of
accounting must take into account its pro rata share of income as it accrues or
is received by the Trustee, whichever is earlier.

A purchaser of a Certificate should be treated as purchasing an
interest in each Equipment Note and any other property in the related Trust at
a price determined by allocating the purchase price paid for the Certificate
among such Equipment Notes and other property in proportion to their fair
market values at the time of purchase of the Certificate. Unless otherwise
indicated in a Prospectus Supplement, Southwest anticipates that when all the
Equipment Notes have been acquired by the related Trust the purchase price paid
for a Certificate of such Trust by an original purchaser of such Certificate
should be allocated among the Equipment Notes held in such Trust in proportion
to their respective principal amounts.

If an Equipment Note held by a Trust is prepaid, a Certificate Owner
will be considered to have sold his pro rata share of that Equipment Note, and
will recognize gain or loss equal to the difference between its aggregate
adjusted basis in the Equipment Note and the amount realized on the sale
(except

19
to the extent attributable to accrued interest, which would be taxable as
interest income if not previously included in income). Subject to the market
discount provisions of the Code (described below), any such gain or loss will
be capital gain or loss if the Equipment Note is considered to have been held
for more than one year. Net capital gains of individuals are, under certain
circumstances, taxed at lower rates than items of ordinary income. With respect
to the Leased Aircraft Notes, an Owner Participant's conveyance of its interest
in a trust owning a Leased Aircraft will not constitute a taxable event to the
holders of interests in the related Leased Aircraft Notes. However, if
Southwest were to assume an Owner Trustee's obligations under the related
Leased Aircraft Notes upon a purchase of the related Aircraft by Southwest,
such assumption might be treated for federal income tax purposes as a taxable
exchange of the respective Equipment Notes resulting in the recognition of
taxable gain or loss under the rules discussed above. If a Certificate Owner
acquires its interest in the Certificates at an amount equal to the outstanding
principal balance (plus accrued interest, if any) of the underlying Equipment
Notes at the time of such acquisition (e.g., a Certificate Owner purchasing at
par in the initial offering of Certificates), then, provided that the
Certificates are not treated as publicly traded for purposes of Treasury
Regulation Section 1.1273-2, and the interest rate on the Certificates is at
least equal to the applicable federal rate at such time, such assumption will
not require a Certificate Owner to report taxable gain or loss. It is
anticipated that the Certificates should not be treated as publicly traded for
this purpose.

SALES OF CERTIFICATES

A Certificate Owner that sells a Certificate should recognize gain or
loss (in the aggregate) equal to the difference between its adjusted tax basis
in the Certificate and the amount realized on the sale (except to the extent
attributable to accrued interest, which should be taxable as interest income).
Subject to the market discount provisions of the Code (described below), any
such gain or loss will be capital gain or loss if the Certificate was held as a
capital asset and will be long-term capital gain or loss if the Certificate was
held for more than one year. Net capital gains of individuals are, under
certain circumstances, taxed at lower rates than items of ordinary income.

MARKET DISCOUNT

A Certificate Owner should be considered to have acquired an interest
in an Equipment Note at a "market discount" to the extent the remaining
principal amount of the Equipment Note allocable to such Certificate Owner's
Certificate exceeds such Certificate Owner's tax basis allocable to such
Equipment Note, unless the excess does not exceed a prescribed de minimis
amount. In the event such excess exceeds the de minimis amount, the
Certificate Owner should be subject to the market discount rules of sections
1276 to 1278 of the Code with regard to its interest in the Equipment Note.

In the case of a sale or certain other dispositions of indebtedness
subject to the market discount rules, section 1276 of the Code requires that
gain, if any, from such sale or disposition be treated as ordinary income to
the extent such gain represents market discount that has accrued during the
period in which such indebtedness was held and was not previously included in
the Certificate Owner's income. If such indebtedness is disposed of in an
nontaxable transaction (other than a nonrecognition transaction described in
Code section 1276(c)), accrued market discount will be includable as ordinary
income as if the Certificate Owner had sold the Certificate at its then market
value.

In the case of a partial principal payment on indebtedness subject to
the market discount rules, section 1276 of the Code requires that such payment
be included in gross income as ordinary income to the extent such payment does
not exceed the market discount that has accrued during the period such

20
indebtedness was held. The amount of any accrued market discount later required
to be included in gross income as ordinary income upon a sale or disposition or
subsequent partial principal payment will be reduced by the amount of accrued
market discount previously so included.

Generally, market discount accrues under a straight line method, or,
at the election of the taxpayer, a constant interest method. However, in the
case of Equipment Notes that constitute installment obligations, the manner in
which market discount is to be accrued has been left to Treasury regulations
not yet issued. Until such Treasury regulations are issued, the explanatory
Conference Committee Report to the Tax Reform Act of 1986 (the "Conference
Report") indicates that holders of installment obligations with market discount
may elect to accrue market discount either on the basis of a constant interest
rate or as follows: the amount of market discount that is deemed to accrue is
the amount of market discount that bears the same ratio to the total amount of
remaining market discount that the amount of stated interest paid in the
accrual period bears to the total amount of stated interest remaining to be
paid on the installment obligation as of the beginning of such period.

Under section 1277 of the Code, if in any taxable year interest paid
or accrued on indebtedness incurred or continued to purchase or carry
indebtedness subject to the market discount rules exceeds the interest
currently includable in income with respect to such indebtedness, deduction of
the excess interest must be deferred to the extent of the market discount
allocable to the taxable year. The deferred portion of any interest expense
will generally be deductible when such market discount is included in income
upon the sale or other disposition (including repayment) of the indebtedness.

Section 1278 of the Code allows a taxpayer to make an election to
include market discount in his gross income currently. If such election is
made, the rules of sections 1276 and 1277 (described above) will not apply to
the taxpayer.

PREMIUM

A Certificate Owner should generally be considered to have acquired an
interest in an Equipment Note at a premium to the extent such Certificate
Owner's tax basis allocable to such Equipment Note exceeds the remaining
principal amount of the Equipment Note allocable to such Certificate Owner's
Certificate. In that event, a Certificate Owner that holds such Certificate as
a capital asset may elect to amortize such premium as an offset to interest
income under section 171 of the Code with corresponding reductions in such
Certificate Owner's tax basis in such Equipment Note. Generally, such
amortization is on a constant yield basis. However, in the case of installment
obligations (such as certain or all of the Equipment Notes), the Conference
Report indicates a Congressional intent that amortization will be in accordance
with the same rules that will apply to the accrual of market discount on
installment obligations. See "Federal Income Tax Consequences -- Market
Discount."

If Equipment Notes may be called at a premium prior to maturity,
amortizable premium may be determined by reference to an early call date. Due
to the complexities of the amortizable premium rules, particularly where there
is more than one possible call date and the amount of any premium is uncertain,
Certificate Owners are urged to consult their own tax advisors as to the amount
of any such amortizable premium.

If a Certificate Owner acquires an interest in a Certificate at a
premium and elects to amortize such premium, and the Internal Revenue Service
successfully challenges the amount of amortization claimed for a particular
period, then such Certificate Owner would be precluded from offsetting interest

21
income on the Equipment Note for such period with the amount of the disallowed
amortization, and the basis of such Equipment Note would be increased
accordingly.

ORIGINAL ISSUE DISCOUNT

Owners of certain debt instruments issued with original issue discount
("OID") that is not de minimis generally must include such OID in income as it
accrues, regardless of their method of accounting. This results in an inclusion
of OID in income before the receipt of cash attributable to such income. It is
anticipated that the Equipment Notes will not be issued with OID. Certain
aggregation rules in the Treasury Regulation relating to OID (the "OID
Regulations"), however, could be interpreted to require that where one investor
purchases Certificates issued by more than one Trust, certain of that
investor's interests in the Equipment Notes in those Trusts must be treated
together as a single debt instrument, which, for purposes of calculating and
amortizing any OID, has a single issue price, maturity date, stated redemption
price at maturity and yield to maturity. If the OID Regulations were applicable
in this way, such aggregation of Certificates could be treated with respect to
such investors as a debt instrument issued with OID.

The OID Regulations provide generally that only debt instruments that
are issued by a single issuer to a single holder are aggregated. The IRS,
however, may aggregate debt instruments that are issued by more than one issuer
or that are issued to more than one holder if the debt instruments are issued
in an arrangement that is designed to avoid the aggregation rule. The OID
Regulations provide an exception to the aggregation rule if the debt instrument
is part of an issue a substantial portion of which is issued for cash to
parties who are not related to the issuer or holder and who do not purchase
other debt instruments of the same issuer in connection with the same
transaction or related transactions. Whether this exception in the OID
Regulations would apply in this case is uncertain. Certificate Owners are urged
to consult their own tax advisors regarding the application of the aggregation
rules.

BACKUP WITHHOLDING

Payments made on Certificates, and proceeds from the sale of
Certificates to or through certain brokers, may be subject to a "backup"
withholding tax of 31% unless a Certificate Owner complies with certain
reporting procedures or is an exempt recipient under section 3406 of the Code.
Any such withheld amounts will be allowed as a credit against the Certificate
Owner's federal income tax.

INFORMATION REPORTS

Information reports will be made by the Trustee to the Internal
Revenue Service, and to Certificate Owners that are not exempt from the
reporting requirements, annually or as otherwise required with respect to
interest paid on the Certificates.

CERTAIN DELAWARE TAXES

The initial Trustee is a Delaware banking corporation. Potter,
Anderson & Corroon, counsel to the Trustee, has advised Southwest that, in its
opinion, under currently applicable law, assuming that each Trust will not be
taxable as a corporation for federal income tax purposes, but, rather, will be
classified as a grantor trust under subpart E, Part I of Subchapter J of the
Code, (i) the Trusts will not be subject to any tax (including, without
limitation, net or gross income, tangible or intangible property, net worth,
capital, franchise or doing business tax), fee or other governmental charge
under the laws of the State

22
of Delaware or any political subdivision thereof and (ii) Certificate Owners
that are not residents of or otherwise subject to tax in Delaware will not be
subject to any tax (including, without limitation, net or gross income,
tangible or intangible property, net worth, capital, franchise or doing
business tax), fee or other governmental charge under the laws of the State of
Delaware or any political subdivision thereof as a result of purchasing, owning
(including receiving payments with respect to) or selling a Certificate.
Neither the Trusts nor the Certificate Owners will be indemnified for any state
or local taxes imposed on them, and the imposition of any such taxes on a Trust
could result in a reduction in the amounts available for distribution to the
Certificate Owners of such Trust. In general, should a Certificate Owner or a
Trust be subject to any state or local tax which would not be imposed if the
Trustee were located in a different jurisdiction in the United States, the
Trustee will resign and a new Trustee in such other jurisdiction will be
appointed.

ERISA CONSIDERATIONS

Unless otherwise indicated in the applicable Prospectus Supplement,
Certificates may not be purchased by, or with assets of, an employee benefit
plan subject to Title I of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or individual retirement account or employee benefit plan
subject to Section 4975 of the Code. Certain governmental plans and
non-electing church plans, however, are not subject to Title I of ERISA or
Section 4975 of the Code, and, therefore, may purchase the Certificates.

PLAN OF DISTRIBUTION

The Certificates being offered hereby may be sold in any one or more
of the following ways from time to time: (i) through agents; (ii) to or through
underwriters; (iii) through dealers; and (iv) directly to other purchasers.

The distribution of the Certificates may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.

Offers to purchase Certificates may be solicited by agents designated
by Southwest from time to time. Any such agent involved in the offer or sale of
the Certificates in respect of which this Prospectus is delivered will be
named, and any commissions payable by Southwest to such agent will be set
forth, in the applicable Prospectus Supplement. Unless otherwise indicated in
such Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment. Any such agent may be deemed to be an
underwriter, as that term is defined in the Securities Act, of the Certificates
so offered and sold.

If the Certificates are sold by means of an underwritten offering,
Southwest will execute an underwriting agreement with an underwriter or
underwriters at the time an agreement for such sale is reached, and the names
of the specific managing underwriter or underwriters, as well as any other
underwriters, and the terms of the transaction, including commissions,
discounts and any other compensation of the underwriters and dealers, if any,
will be set forth in the Prospectus Supplement which will be used by the
underwriters to make resales of the Certificates in respect of which this
Prospectus is delivered to the public. If underwriters are utilized in the sale
of the Certificates in respect of which this Prospectus is delivered, the
Certificates will be acquired by the underwriters for their own account and may
be resold from time to time in one or more transactions, including negotiated

23
transactions, at fixed public offering prices or at varying prices determined
by the underwriters at the time of sale. Certificates may be offered to the
public either through underwriting syndicates represented by managing
underwriters or directly by the managing underwriters. If any underwriter or
underwriters are utilized in the sale of the Certificates, unless otherwise
indicated in the Prospectus Supplement, the underwriting agreement will provide
that the obligations of the underwriters are subject to certain conditions
precedent and that the underwriters with respect to a sale of Certificates will
be obligated to purchase all such Certificates if any are purchased. Southwest
does not intend to apply for listing of the Certificates on a national
securities exchange. If the Certificates are sold by means of an underwritten
offering, the underwriters may make a market in the Certificates as permitted
by applicable laws and regulations. No underwriter would be obligated, however,
to make a market in the Certificates and any such market-making could be
discontinued at any time at the sole discretion of such underwriter.
Accordingly, no assurance can be given as to the liquidity of, or trading
markets for, the Certificates.

If a dealer is utilized in the sale of the Certificates in respect of
which this Prospectus is delivered, such Certificates will be sold by the
Trustee to the dealer as principal. The dealer may then resell such
Certificates to the public at varying prices to be determined by such dealer at
the time of resale. Any such dealer may be deemed to be an underwriter, as such
term is defined in the Securities Act, of the Certificates so offered and sold.
The name of the dealer and the terms of the transaction will be set forth in
the Prospectus Supplement relating thereto.

Offers to purchase Certificates may be solicited directly and the sale
thereof may be made directly to institutional investors or others, who may be
deemed to be underwriters within the meaning of the Securities Act with respect
to any resale thereof. The terms of any such sales will be described in the
Prospectus Supplement relating thereto.

Agents, underwriters and dealers may be entitled under relevant
agreements to indemnification or contribution by Southwest against certain
liabilities, including liabilities under the Securities Act.

Agents, underwriters and dealers may be customers of, engage in
transactions with, or perform services for, Southwest in the ordinary course of
business.

If so indicated in the applicable Prospectus Supplement, agents,
underwriters or dealers may be authorized to solicit offers by certain
institutions to purchase Certificates at the public offering prices set forth
in the applicable Prospectus Supplement pursuant to delayed delivery contracts
("Contracts") providing for payment and delivery on a specified date or dates.
A commission indicated in the applicable Prospectus Supplement will be paid to
agents, underwriters and dealers soliciting purchases of Certificates pursuant
to Contracts accepted by Southwest.

LEGAL OPINIONS

Unless otherwise indicated in the applicable Prospectus Supplement,
the validity of the Certificates offered hereby will be passed upon for
Southwest by Deborah Ackerman, Associate General Counsel for Southwest, and for
any agents, underwriters or dealers by counsel to be identified in the
applicable Prospectus Supplement. Unless otherwise indicated in the applicable
Prospectus Supplement, both Ms. Ackerman and counsel for any agents,
underwriters or dealers will rely on the opinion of counsel for Wilmington
Trust Company, individually and as Trustee for the Certificates of each Trust,
as to certain matters relating to the authorization, execution and delivery of
such Certificates by and the valid and binding effect thereon, such Trustee.
The statements of law and legal conclusions set forth under "Federal

24
Income Tax Consequences" are based on the opinion of Vinson & Elkins L.L.P.,
Houston, Texas. Ms. Ackerman beneficially owns approximately 8,700 shares of
common stock of the Company. Members of the firm of Vinson & Elkins L.L.P.
having responsibility for the Company's legal matters beneficially own
approximately 5,500 shares of common stock of the Company.

EXPERTS

The consolidated financial statements of Southwest Airlines Co.
appearing in the Southwest Airlines Co. Annual Report (Form 10-K) for the year
ended December 31, 1994, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements have
been incorporated herein by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.

25
APPENDIX I

GLOSSARY OF CERTAIN TERMS

The following is a glossary of certain terms used in this Prospectus.
The definitions of terms used in this glossary that are also used in the Basic
Agreement, Trust Supplements, Indentures, Leases or Note Purchase Agreements
are qualified in their entirety by reference to the definitions of such terms
contained therein. Additional terms or changes in the terms defined below may
appear in the applicable Prospectus Supplement.

"Aircraft" means Leased Aircraft and Owned Aircraft.

"Aviation Act" means the Federal Aviation Act of 1958, as amended, and
the applicable regulations thereunder.

"Basic Agreement" means the Pass Through Trust Agreement, dated as of
February 1, 1993, between Southwest and the Trustee.

"Business Day," when used with respect to the Certificates of any
series, means any day other than a Saturday, a Sunday, or a day on which
banking institutions in New York, Dallas, Texas or a city and state in which
the Trustee or any related Loan Trustee maintains its Corporate Trust Office or
receives and disburses funds are authorized or obligated by law, regulation or
executive order to be closed.

"Certificate" means each of the Certificates to be issued by each of
the Trusts pursuant to the Basic Agreement.

"Certificate Account" means the one or more non-interest-bearing
accounts established and maintained by the Trustee pursuant to the Basic
Agreement on behalf of the Certificateholders of each Trust for the deposit of
payments representing Scheduled Payments on the Equipment Notes held in such
Trust.

"Certificate Owner" means a person having a beneficial interest in a
Certificate.

"Certificateholder" means the Person in whose name a Certificate is
registered.

"Code" means the United States Internal Revenue Code of 1986, as
amended.

"Commission" means the Securities and Exchange Commission.

"Engine" means each of the engines relating to an Aircraft.

"Equipment Notes" means the Owned Aircraft Notes and the Leased
Aircraft Notes.

"Event of Default" means, with respect to the Equipment Notes held in
any Trust, the occurrence and continuance of an Indenture Default under one or
more of the related Indentures.

A-1
"Indenture" means each of the separate trust indenture and security
agreements entered into from time to time between (a) Southwest and a Loan
Trustee with respect to the issuance of Owned Aircraft Notes or (b) an Owner
Trustee and a Loan Trustee with respect to the issuance of Leased Aircraft
Notes as each such agreement may hereafter be amended or supplemented in
accordance with its respective terms.

"Indenture Default" means each of the events designated as an event of
default in an Indenture, as described in the applicable Prospectus Supplement.

"Lease" means each of the Lease Agreements entered into with respect
to a Leased Aircraft between an Owner Trustee and Southwest, as each such Lease
Agreement may from time to time be amended or supplemented in accordance with
its respective term.

"Lease Event of Default" means each of the events designated as an
event of default in a Lease, as described in the applicable Prospectus
Supplement.

"Leased Aircraft" means each aircraft, including its Engines, leased
by an Owner Trustee to Southwest pursuant to a Lease.

"Leased Aircraft Notes" means the equipment notes issued on a
nonrecourse basis by the Owner Trustees pursuant to the Indentures relating to
Leased Aircraft.

"Loan Trustee", when used with respect to any Equipment Note or the
Indenture applicable thereto, means the bank or trust company designated as
indenture trustee under such Indenture, and any successor to such Loan Trustee
as such trustee.

"Note Purchase Agreement," when used with respect to any Equipment
Note, means the note purchase, participation, refinancing or similar agreement
or agreements referred to in the related Indenture, providing for, among other
things, the purchase of Equipment Notes by the Trustee.

"Owned Aircraft" means each aircraft, including its Engines, that is
security for the obligations of Southwest under the Owned Aircraft Notes.

"Owned Aircraft Notes" means the equipment notes issued, with recourse
to Southwest, by Southwest pursuant to the Indentures relating to Owned
Aircraft.

"Owner Participant" means each of the owner participants for whose
benefit an Owner Trustee owns a Leased Aircraft leased to Southwest pursuant to
a Lease and its permitted successors and assigns.

"Owner Trustee", when used with respect to any Leased Aircraft Note or
the Indenture applicable thereto or the Lease related thereto, means the "Owner
Trustee" referred to in the applicable Indenture, not in its individual
capacity but solely as trustee; and each other person which may from time to
time be acting as Owner Trustee in accordance with the provisions of the
applicable Indenture or Lease.

"Pool Balance" means, for each Trust, as of any date, the aggregate
unpaid principal amount of the Equipment Notes held in such Trust on such date
plus any amounts in respect of principal on such Equipment Notes held by the
Trustee and not yet distributed, plus any amount of any moneys held in the
related Escrow Account (other than earnings thereon). The Pool Balance for each
Trust as of any Regular

A-2
Distribution Date or Special Distribution Date shall be computed after giving
effect to the payment of principal, if any, on the Equipment Notes held in such
Trust and distribution thereof to be made on that date.

"Pool Factor" means, for each Trust, as of any date, the quotient
(rounded to the seventh decimal place) computed by dividing (i) the Pool
Balance by (ii) the aggregate original principal amount of the Certificates of
such Trust. The Pool Factor for each Trust as of any Regular Distribution Date
or Special Distribution Date shall be computed after giving effect to the
payment of principal, if any, on the Equipment Notes held in such Trust and
distribution thereof to be made on that date.

"Regular Distribution Date" means each date on which a Scheduled
Payment will be distributed, as specified in the applicable Prospectus
Supplement.

"Scheduled Payment" means each payment of interest or principal on an
Equipment Note scheduled to be received by the Trustee on the Regular
Distribution Dates specified in the applicable Prospectus Supplement.

"Special Distribution Date" means each date on which a Special Payment
will be distributed, as specified in the applicable Prospectus Supplement.

"Special Payment" means (i) any payment of principal, premium, if any,
and interest resulting from the redemption or purchase of an Equipment Note
held in a Trust, (ii) any payment of principal and interest (including any
interest accruing upon default) on, or any other amount in respect of, an
Equipment Note held in a Trust upon an Indenture Default in respect of, or upon
acceleration relating to, such Equipment Note, (iii) any payment of principal,
premium, if any, and interest on an Equipment Note which is not in fact paid
within five days of a Regular Distribution Date, (iv) any proceeds from the
sale of any Equipment Note upon an Event of Default, or (v) the amounts
available for distribution from a Trust as a result of the failure to apply
such amounts to the purchase of Equipment Notes on or prior to the date
specified in the applicable Prospectus Supplement.

"Special Payments Account" means the one or more accounts established
and maintained by the Trustee pursuant to the Basic Agreement on behalf of the
Certificateholders of each Trust for the deposit of payments representing
Special Payments.

"Specified Investments" when used with respect to any Trust, means,
unless otherwise specified in the related Prospectus Supplement, (i)
obligations of, or guaranteed by, the United States of America or agencies
thereof, (ii) open market commercial paper of any corporation incorporated
under the laws of the United States of America or any State thereof rated at
least P-2 or its equivalent by Moody's Investors Service, Inc. or at least A-2
or its equivalent by Standard & Poor's Corporation, (iii) certificates of
deposit issued by, or bankers' acceptances of, or time deposits (including
overnight deposits) with, any bank, trust company or national banking
association incorporated or doing business under the laws of the United States
or any political subdivision thereof having combined capital and surplus and
retained earnings of at least $500,000,000 (including any Loan Trustee or Owner
Trustee if such conditions are met), (iv) U.S. dollar denominated offshore
certificates of deposit issued by, or offshore time deposits with, any
commercial bank described in (iii) or any subsidiary thereof, and (v)
repurchase agreements with any financial institution described in clause (iii)
above having a combined capital and surplus of at

A-3
least $500,000,000 fully collateralized by obligations of the type described in
clauses (i) through (iv) above; provided that if all of the above investments
are unavailable, the entire amounts to be invested may be used to purchase
federal funds from an entity described in clause (iii) above; and provided
further that no investment shall be eligible as a "Specified Investment" unless
the final maturity or date of return of such investment is on or before the
date applicable to the particular Trust, as specified in the related Prospectus
Supplement.

"Trust" means each of the Southwest Airlines Pass Through Trusts to be
formed pursuant to the Basic Agreement and a Trust Supplement.

"Trustee" means Wilmington Trust Company, a Delaware banking
corporation, in its capacity as Trustee under each Trust, and each other person
which may from time to time act as successor Trustee under such Trust.

"Trust Property" means the Equipment Notes held as the property of a
Trust and all funds from time to time deposited in the related Certificate
Account, the related Special Payments Account and any other account maintained
as a part of such Trust, including any proceeds from the sale by the Trustee of
any such Equipment Note in connection with an Event of Default.

"Trust Supplement" means each of the Trust Supplements between
Southwest and the Trustee, pursuant to each of which one Trust is formed and
one series of Certificates is issued to evidence fractional undivided ownership
interests in the Trust Property held in such Trust.

A-4

(BACK COVER)

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS WITH RESPECT TO THIS OFFERING, OTHER
THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR IN ANY PROSPECTUS SUPPLEMENT,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER,
DEALER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY CERTIFICATES IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.

NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THEREOF OR THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE HEREIN OR THEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THIS DATE.

__________________

TABLE OF CONTENTS

SOUTHWEST AIRLINES CO.

____________

PASS THROUGH CERTIFICATES
PROSPECTUS

____________

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Securities and Exchange Commission Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 137,950
Trustee's Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Printing and Engraving Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Rating Agency Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,000
Accountants' Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
Blue Sky and Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,050
----------

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 700,000
==========

All amounts are estimated except for the registration fee.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article VIII, Section 1 of Registrant's Bylaws provides as follows:

"Right to Indemnification: Subject to the limitations and
conditions as provided in this Article VIII, each person, who was or is made a
party to, or is threatened to be made a party to, any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative (hereinafter called a "proceeding"), or any appeal
in such a proceeding or any inquiry or investigation that could lead to such a
proceeding, by reason of the fact that he (or a person of whom he is the legal
representative) is or was a director or officer of the corporation (or while a
director or officer of the corporation is or was serving at the request of the
corporation as a director, officer, partner, venturer, proprietor, trustee,
employee, agent, or similar functionary of another foreign or domestic
corporation, partnership, joint venture, proprietorship, trust, employee
benefit plan, or other enterprise) shall be indemnified by the corporation to
the fullest extent permitted by the Texas Business Corporation Act, as the same
exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the corporation to provide
broader indemnification rights than said law permitted the corporation to
provide prior to such amendment) against judgments, penalties (including excise
and similar taxes and punitive damages), fines, settlements and reasonable
expenses (including, without limitation, court costs and attorneys' fees)
actually incurred by such person in connection with such proceeding, appeal,
inquiry or investigation, and indemnification under this Article VIII shall
continue as to a person who has ceased to serve in the capacity which initially
entitled such person to indemnity hereunder; provided, however, that in no case
shall the corporation indemnify any such person (or the legal representative of
any such person) otherwise than for his reasonable expenses, in respect of any
proceeding (i) in which such person shall have been finally adjudged by a court
of competent jurisdiction (after exhaustion of all appeals therefrom) to be
liable on the basis that personal benefit was improperly received by him,
whether or not the benefit resulted from an action taken in such person's
official capacity, or (ii) in which such person shall have been found liable to
the corporation; and provided, further, that the corporation shall not
indemnify any such person for his reasonable expenses actually incurred in
connection with any proceeding in which he shall have been found liable for
willful or intentional misconduct in the performance of his duty to the
corporation. The

II-1
rights granted pursuant to this Article VIII shall be deemed contract rights,
and no amendment, modification or repeal of this Article VIII shall have the
effect of limiting or denying any such rights with respect to actions taken or
proceedings arising prior to any such amendment, modification or repeal. It is
expressly acknowledged that the indemnification provided in this Article VIII
could involve indemnification for negligence or under theories of strict
liability."

Article Ten of the Company's Articles of Incorporation provides that a
director of the corporation shall not be liable to the corporation or its
shareholders for monetary damages for an act or omission in the director's
capacity as a director, subject to certain limitations.

Article 2.02-1 B. of the Texas Business Corporation Act provides that,
subject to certain limitations, "a corporation may indemnify a person who was,
is, or is threatened to be made a named defendant or respondent in a proceeding
because the person is or was a director only if it is determined in accordance
with Section F of this article that the person: (1) conducted himself in good
faith; (2) reasonably believed: (a) in the case of conduct in his official
capacity as a director of the corporation, that his conduct was in the
corporation's best interests; and (b) in all other cases, that his conduct was
at least not opposed to the corporation's best interests; and (3) in the case
of any criminal proceeding, had no reasonable cause to believe his conduct was
unlawful."

The Company also maintains directors' and officers' liability insurance.

The forms of Underwriting Agreement filed as Exhibits 1.1 and 1.2 to
this Registration Statement provide for indemnification of directors and
officers of the Company against certain liabilities.

ITEM 16. EXHIBITS.

1.1 Form of Underwriting Agreement for Debt Securities (incorporated by reference to Exhibit 1 to
the Company's Registration Statement on Form S-3 (File No. 33-50930)).
1.2 Form of Underwriting Agreement for Pass Through Certificates (incorporated by reference to
Exhibit 1 to the Company's Registration Statement on Form S-3 (File No. 33-59018)).
4.1 Form of Indenture between the Company and relating to Debt
Securities.
4.2 Pass Through Trust Agreement, dated as of February 1, 1993, between Southwest and Wilmington
Trust Company (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-3 (File No. 33-59018)).
5.1 Opinion of Deborah Ackerman, Associate General Counsel of Southwest, re legality of Pass
Through Certificates being registered.
5.2 Opinion of Deborah Ackerman, Associate General Counsel of Southwest, re legality of Debt
Securities being registered (to be filed by amendment).
5.3 Opinion of Potter, Anderson & Corroon relating to Pass Through Certificates.
8 Tax opinion of Vinson & Elkins L.L.P.
12 Statement re computation of ratios of earnings to fixed charges (incorporated by reference to
Exhibit 12 to the Company's Current Report on Form 8-K dated February 27, 1995 (File No. 1-
7259).
23.1 Consent of Independent Auditors.

II-2

23.2 Consent of Deborah Ackerman, Associate General Counsel of Southwest (contained in the opinions
filed as Exhibits 5.1 and 5.2 hereto respectively).
23.3 Consent of Potter, Anderson & Corroon (contained in the opinion filed as Exhibit 5.3 hereto).
24 Powers of Attorney from the Company's directors.
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of
, as Trustee under the Debt Securities (to be filed by
amendment).
25.2 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of
Wilmington Trust Company, as Trustee under the Pass Through Trust Agreement.

ITEM 17. UNDERTAKINGS.

A. The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;

(iii) to include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;

provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post- effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

II-3
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

II-4
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized in the City of Dallas, State of Texas on May 3, 1995.

SOUTHWEST AIRLINES CO.

By /s/ Gary C.Kelly
Gary C. Kelly
Vice President-Finance,
Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on May 3, 1995.

Signature Capacity
--------- --------

/s/ Herbert D. Kelleher Chairman of the Board of Directors,
- ------------------------------------------ President and Chief Executive Officer
Herbert D. Kelleher

/s/ Gary C. Kelly Vice President-Finance
- ------------------------------------------ (Chief Financial and Accounting Officer)
Gary C. Kelly

* Director
- ------------------------------------------
Samuel E. Barshop

* Director
- ------------------------------------------
Gene H. Bishop

Director
- ------------------------------------------
William P. Hobby

* Director
- ------------------------------------------
Travis C. Johnson

* Director
- ------------------------------------------
R. W. King

Director
- ------------------------------------------
C. Webb Crockett

Director
- ------------------------------------------
June M. Morris

* Director
- ------------------------------------------
Walter M. Mischer, Sr.

*By:/s/ Gary C. Kelly
--------------------------------------
Gary C. Kelly
Attorney-in-Fact

II-5
INDEX TO EXHIBITS

1.1 Form of Underwriting Agreement for Debt Securities (incorporated by reference to Exhibit 1 to
the Company's Registration Statement on Form S-3 (File No. 33-50930)).
1.2 Form of Underwriting Agreement for Pass Through Certificates (incorporated by reference to
Exhibit 1 to the Company's Registration Statement on Form S-3 (File No. 33-59018)).
4.1 Form of Indenture between the Company and relating to Debt
Securities.
4.2 Pass Through Trust Agreement, dated as of February 1, 1993, between Southwest and Wilmington
Trust Company (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-3 (File No. 33-59018)).
5.1 Opinion of Deborah Ackerman, Associate General Counsel of Southwest, re legality of Pass
Through Certificates being registered.
5.2 Opinion of Deborah Ackerman, Associate General Counsel of Southwest, re legality of Debt
Securities being registered (to be filed by amendment).
5.3 Opinion of Potter, Anderson & Corroon relating to Pass Through Certificates.
8 Tax opinion of Vinson & Elkins L.L.P.
12 Statement re computation of ratios of earnings to fixed charges (incorporated by reference to
Exhibit 12 to the Company's Current Report on Form 8-K dated February 27, 1995 (File No. 1-
7259).
23.1 Consent of Independent Auditors.
23.2 Consent of Deborah Ackerman, Associate General Counsel of Southwest (contained in the opinions
filed as Exhibits 5.1 and 5.2 hereto respectively).
23.3 Consent of Potter, Anderson & Corroon (contained in the opinion filed as Exhibit 5.3 hereto).
24 Powers of Attorney from the Company's directors.
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of
, as Trustee under the Debt Securities (to be filed by
amendment).
25.2 Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of
Wilmington Trust Company, as Trustee under the Pass Through Trust Agreement.

Form: S-3

Documents

S-3: Registration statement for specified transactions by certain issuers