Loving Southwest Airlines (NYSE:LUV) is easy -- and not just because it's beautiful (or because of its cute ticker). Rival Continental (NYSE:CAL) is delaying plane shipments, and American (NYSE:AMR) is cutting flights. Southwest just continues to deliver. Don't take my word for it; check out today's second-quarter report, or for that matter, the stock's premium valuation.

Like its rivals, Southwest received a government grant this quarter under the Emergency Wartime Supplemental Appropriations Act. Thanks in part to that gift of green, the airline earned $246 million in the second quarter. Unlike Continental, Northwest (NASDAQ:NWAC), and Delta (NYSE:DAL), however, Southwest managed to turn a profit before the government's help.

For the quarter, total revenues logged in at $1.5 billion, up 2.9% year over year. Excluding items, earnings jumped 22.6% to $103 million, or $0.13 per share, from last year's $84 million, or $0.10 a share. The company, which generated $638 million in operating cash flow for the quarter and $313 million of free cash flow, closed out the quarter with $2.2 billion on its balance sheet.

Southwest even has plans to accelerate deliveries of new jetliners from Boeing (NYSE:BA) in the coming years. As a result, the airline's capacity should increase by 6%-7% in 2004 and another 10% in both 2005 and 2006. It also sees opportunities to expand its flight offerings into and out of St. Louis in the wake of American's decision to cut back on flights there.

Yes, Southwest stands out, as does JetBlue (NASDAQ:JBLU), as an efficient operation amid a contingent of fat and inefficient competitors. And, yes, I have every reason to believe that it can sustain the same excellence it has for 30 years. My concern is valuation: In my view, a P/E of 57 is just too pricey for an airline, even one as worthy of a premium as this one.

At today's prices, Southwest flies too near the sun.