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DMN: American Airlines, Southwest diverge on labor approaches

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Southwest Airlines Co. has negotiated contracts with three unions in recent months, and each of the deals would give pay raises to employees. American Airlines Inc. doesn't have a deal with any of its three major unions as it maintains a negotiating strategy aimed at getting its expenses down and certainly not raising its unit costs. Who's got the smarter business strategy? It may not be as easy a question as it seems.

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"Any vibrant company, the employees are there building their future. It makes no sense to me to tell all of our people that you're not ever going to get a raise. There's just no hope for you. That's silly.  If a company is successful, they ought to share in those rewards. We have always said to our employees, 'Yes, as much as we can, we're going to pay you as much as we can afford,'" -Gary Kelly, Southwest Airlines Chairman, President, and CEO