Let me see if I can spell this out for you in simple terms...

First question - In absolute terms SWA cannot afford to pay its work force as much as it does. It is paying salaried and non-salaried employees more to quell labor disruptions of any kind whether that is a strike, attrition or defection to a competitor. As long as SWA had a massive competitive advantage, by and large due to fuel they could afford what they were doing. This advantage does not exist anymore, margins have fallen, productivity has fallen and CASM has risen yet wages have continued to rise across the board without almost any control. I am not even talking about pay cuts or giving an inch up of pay, I am talking about releasing the stranglehold on the operation as a starting point. Right now what you are seeing is a temporary bump in absolute profits (much less margins) due to a capacity constraint, costs hiden by increasing ASMs due to 738/Evolve introductions along with a slew of new fees and devaluations which over time will devalue the whole brand even more. It isnt sustainable as it has nothing to do with their long-term strategic plan. The legacies know it, we know it and it is no secret. There is blood in the water.

Your second question on how I know this - I worked at SWA in a position that was privy to a slew of confidential information including CASM make-up and projection, information that in that short time period has not changed as there has not been any massive development on the CASM or RASM front. The pay in itself in the pilot contract is not even the problem (hell its not even a problem to begin with, that is the wrong word to use there), it is the restrictions that artificially hamper SWA from responding to competition including us. Do not think for one second I am talking here about whether a pilot should have X numbers of days off or sit on short or long call, that is petty kind of stuff.

To your last comment - Hardly, we are not much like Southwest was. We are in a much weaker position, it is important that everyone realize that. Not only are we not the only LCC/ULCC in the market right now we have many disadvantages that SWA did not have in their time of explosive growth:

• Fuel hedging - Does not exist to protect future variable costs. Planning for this is much harder.
• Legacies - Much lower cost and much more flexible now vs. what was back then.
• Our ex-fuel CASM advantage even vs. SWA itself is nowhere near what SWA had vs. competitors historically
• We have no customer service, hard product or operational differentiation that SWA had. In fact this is a detriment as of right now to us. Even a carrier such as FR that we are quasi-based off of has operations that rival Hawaiian in just about every dispatch and on-time metric.

I am not saying we do not have advantages or that in some shape we do not resemble SWA with explosive growth. We certainly do, but our footing with <60 aircraft and riding on costs alone is not nearly as stable as it will be with critical mass.

If SWAPA threatened a strike tomorrow and WN management gave a 1st year FO $150/hr to quash it would you say that we need to go to $175 because its SWA +1? Would that be smart? While I am not implying that the numbers are this drastic as of right now they are very well in this category of the equilibrium. BTW if you want a true test of how un-biased I approach this if you told me Delta needs to go SWA +1 I wouldnt even waste time with an answer here for the very reason that Delta actually has the numbers and long-term strategy behind them to shoulder almost any kind of reasonable contract that any of you can dream up of.

I hope you dont feel like this is some sort of attack on pilots, frankly as far as Im concerned its a hilariously small % of the pot when you consider the WN labor pool has unskilled labor getting paid 80k for throwing baggage (4x that of someone who flies a part 121 aircraft) or 10 consultants making 6 figures and doing absolutely nothing to dig that carrier out of the massive hole they are in or souls that are making close to 90k walking around airports system-wide with a walkie talkies and solving problems that a kindergarden teacher for 35k does a better job of.

Yes, and?