A preface: I'm a couple years out from a mil retirement. Therefore, a long-time lurker and have only posted a few times. Just trying to learn more about this industry and any prospects for the future.

My question is regarding contract negotiations/updates. I generally understand the background -- big concessions by labor in years past helped to ward off bankruptcy, historic profits, etc. I also lack an understanding of the specifics -- like the details of the process, or what happens at the end of contract date without a new contract.

So to my question, What is the incentive for a company to respond to requests for higher pay, scope, improved work rules, etc.? Why would it ever agree to pay more if the previous contract is automatically extended? What is the eventual recourse available to labor besides rejecting a contract offer over and over? Sure, eventually the road leads towards a possible strike, but that would take years, right? And the longer it takes for a company to improve pay/PS/work rules, the more it "saves", correct?

I understand the "carrot" from the pilot group to hold out for something better, but is there a carrot (or a stick for that matter) for the airline to reach an agreement?

Just looking to understand the landscape. Thanks.
RBA