High stakes -- some very high stakes -- are being played for in the airline industry. In more than a year of negotiations, United Airlines has failed to reach a new contract with its pilots. Now, barring an 11th-hour compromise, United pilots are scheduled to strike -- at one minute past midnight tonight.
A strike at the nation's largest airline would have a major impact on all parties involved, including:
United's passengers. A strike could mean a scramble to find seats on other carriers.
The airline industry. A strike is seen as the key showdown for major airlines eager to cut labor costs. If United succeeds in reducing pay for new pilots, the rest of the industry is expected to follow.
Airline pilots. A fight at United marks a critical juncture for the pilots' organization. After years of union apathy and good relations with management, pilots are locked in a struggle over a contract that could affect pilot pay for years to come.
``In the past . . . the company has really had a high regard for the pilots,'' says John LeRoy, a United captain and spokesman for the Air Line Pilots Association (ALPA).
But no longer, he adds, glancing periodically out an office window, as huge jets land at nearby O'Hare International Airport. The pilots ``now recognize that they are a labor union and they have to act like that.''
The key area of disagreement in the negotiations is United's so-called two-tier wage proposal. Under this plan, the company would pay newly hired pilots significantly less than current pilots. Once the new hires reached the level of captain, a process that could take 20 years, they would be paid at a higher scale. ``Our primary objective is to get a contract, a cost-competitive contract, without a strike,'' says United spokesman Chuck Novak.
The pilots disagree with the plan. New hires should catch up to the higher pay scale much faster, perhaps after five years, Captain LeRoy says. ``The cockpit is a workplace that requires mutual trust and cooperation.'' This would be hard to achieve if some workers are being discriminated against, he says.
If United pilots strike at midnight, it is unclear how many flights United could continue operating. The company says it has a pool of replacement pilots, perhaps 1,000 of them, as well as $600 million in cash and a $1.5 billion credit line to keep operating.
The company ``can last a long time,'' says Robert Joedicke, airline analyst for Shearson Lehman Brothers Inc. ``The key will be, obviously, how successful United is in bringing on newly trained pilots'' and United pilots who cross the picket lines. The airline is guaranteeing $75,000 a year for qualified captains and $50,000 for first officers who join the company.
But ALPA spokesmen say they doubt many of their own pilots will cross picket lines. And according to a new report, United will not be able to replace its pilots in a reasonable amount of time or at a reasonable cost. This is partly due to record pilot hiring in the industry, says the report by Future Aviation Professionals of America, an Atlanta-based career information service.
United's success in bringing down labor costs will be closely watched by other airlines, says Louis Smith, president and founder of the career service. ``This is a pivotal point in labor relations and pilot pay. . . . As United goes, so goes the industry.''
Much is at stake for United itself, analysts add. Its chief rival, American Airlines, has already managed to get its own pilots union to accept a two-tier wage scale. Even though United had record pre-tax profits last year, ``the company is just trying to prepare itself for the future,'' says Mark Daugherty, airline analyst for Dean Witter Reynolds Inc.
The pilots' union also has much at stake.
``This is probably the critical juncture in the history of pilot unionization,'' says George E. Hopkins, author of two books on the subject and a history professor at Western Illinois University.
``Historically, ALPA has never won a strike on pure economic muscle,'' he says. Instead, the pilots have relied on government intervention -- dating back to the old government mail contracts -- to win high pay. By the early 1970s, the union abandoned confrontation with airline management, cushioned by regulations that passed higher costs on to the consumer.
In the process, the union became conservative and, in the eyes of other unions, arrogant, Professor Hopkins says. ``They don't have many friends left.''
But the latest challenges of deregulation may cause ALPA to abandon its accommodation to management and become more confrontational -- a tradition of American unions.
``If they stick together, they can win,'' Hopkins says. But ``they haven't been tested in a long time.''