Southwest Airlines (LUV: sentiment, chart, options) is drawing the ire of its former fans after announcing its new fare structure, which is designed to offer preferential treatment to higher-paying customers. The move represents a departure from LUV's previously hoi polloi-friendly business model, since the airline is "famous for its lack of elitism." As a result, those commoners that used to be LUV's bread and butter are in an uproar. One writer posting a comment to the company's blog declared, "Not since Coke tried to change its formula years ago has a major corporation made such a marketing blunder" fighting words by anyone's estimation.

The fare overhaul represents an attempt by CEO Gary Kelly to gain a competitive edge in a field that's increasingly brutal, thanks to the entre of other low-cost airlines like Virgin America and skyrocketing crude prices. Southwest has a bit of a leg up, thanks to its fuel-hedging program, but Kelly told BusinessWeek that "We're going to need to compete less on price and more on something else."

Apparently, that "something else" involves "luring lucrative business travelers" by adding in-flight Internet connectivity and luxurious leather chairs at the gate that feature outlets for charging laptops and cell phones. Additionally, travelers who pay an extra $30 for their ticket known as the "Business Select" fare get to board the plane first, where they can enjoy a free cocktail and rack up extra frequent-flier miles. But Southwest isn't stopping there; LUV is also planning international flights to Mexico and the Caribbean perfect for when those business travelers want to cash in their frequent-flier miles for an exotic vacation.

It's almost a given that a company will garner plenty of negative feedback whenever it attempts to change its identity the "new Coke" metaphor is apt for that very reason. Since Southwest identified itself as the fun, wacky, low-key alternative to buttoned-down competitors like Delta Air Lines (DAL: sentiment, chart, options) , it's natural that LUV's core customer base is turned off by the company's unabashed wooing of business travelers. But, it's not a given that LUV will have to revert to its Coke-classic ways company spokeswoman Beth Harbin notes that a similar uproar ensued after LUV rolled out online check-in service years ago, and that tumult eventually died down.

In fact, from a contrarian standpoint, an increase in investor pessimism toward Southwest could be a positive development. The stock is down 27.5% from its July 2006 peak at 18.15, and LUV has been consistently pushed lower by its resistant 10-week moving average. The shares are now trading at multi-year lows, yet investors don't seem too concerned. In the December and January series, peak call open interest lies at the out-of-the-money 15 and 17.50 strikes, with a total of 49,044 contracts in residence indicating that option traders expect the stock to rally sharply higher during the short term.

Plus, only 3.4% of the stock's available float has been sold short a minor accumulation of bearish bets that's hardly commensurate with the equity's consistent underperformance. Considering the stiff technical and fundamental challenges facing the company, it seems unlikely that LUV can climb higher in the midst of its "extreme gate makeover"; in the meantime, an increase in bearish sentiment could set the stage for future gains. Once the dust settles from LUV's redesign, a healthy accumulation of pessimism from investors could translate to buying pressure. In the near term, though, don't look for LUV to soar higher.