Pilots at Southwest Airlines Co. narrowly rejected a contract offer Wednesday with 51 percent of its pilots voting against the contract offer proposed by management.

Under the new contract, Southwest offered pilots retroactive 2% pay increases for 2007 and 2008, in addition to a 2% increase in September 2009.

The union, which represents Dallas-based Southwest’s 5,900 pilots, Southwest Airlines Pilots’ Association, has been negotiating the new contract since September 2006.

A date to return to the bargaining table could come as soon as 60 days or it could be indefinite.

Our pilots have spoken, and the group has stated there is more work to be done, said Capt. Carl Kuwitzky, President of the Southwest Airlines Pilots' Association.

Southwest's overall operating costs are among the lowest in the industry. But its labor costs have grown more quickly in recent years than those of rivals that cut staff and benefits.

The Dallas-based airline in a statement, said it was disappointed by the pilots' rejection of the contract but that it welcomed the opportunity to resume negotiations.

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