First let me start off by saying that I think pilots are indeed underpaid. I think management is over paid, and whereas I think that upper management should be paid more the gap is a little too large for my liking. Both management and the pilots are being paid because of their large amount of responsibility in their descision making. Management has to make more descisions than a pilot, but a pilot's descision, just like management's, can make or break a company.

Let me add, however, that the race to the bottom can be linked to Southwest's fuel hedges. This, of course, is not the only reason, but I believe it to be a large one. Fuel was actually the largest expense to some airlines in 2005, surpassing labor. Airlines need to find some way to compete with Southwest. If they raise the ticket prices, then they lose the market, so it's easy to see where they will go to try and cut costs. As Southwest begins to lose its hedges, they will either need to accept a shrinking profit margin, or raise their prices, the rest of the market will become more competitive and other airlines will not have as much pressure on cutting costs and be able to pay their pilots more.

When it's heges run ot in 2010, things should start to look better for the rest of the industry.

I also can't help but feel sorry for whoever is on the other end of those hedges. They're completely losing their ass!