As a Southwest mechanic, I'll give you my take on things:
I can understand the pilots' perspective on the matter. They took a pay freeze from 1993-1999, although they did receive stock options. They fell behind the rest of the industry in "hard pay" during that time, but the stock options helped make up for it. The company now realizes that the stock has not been performing at the same level, so they are offering a contract extension through 2006 with a "hard pay" raise to help keep the pilots' wages competitive. SWAPA feels that the offer isn't good enough, although I have heard through the grapevine that many pilots will vote in favor of it.
Both sides have valid points. No one wants to hurt the company or it's ability to make a profit, but I respect our pilots' desire to be paid industry standard wages. They do a great job (typically working more hours than pilots at other airlines) and should be paid accordingly. Many business analysts agree and feel that Southwest can afford to pay their pilots the same wages as other carriers. Southwest wants to protect it's low-cost advantage and there's nothing wrong with that; they have many intelligent people at the G.O. working to keep the airline profitable.
Basically, it's a balancing act. On one hand, the company needs to insure its long-term health and performance, but it shouldn't do it at the expense of employee relations (and that goes for all employee groups, not just the pilots).
I hope that, in the end, everyone comes out happy.
Patrick Bateman is my hero.