<B>Bush Wary Of Air Strikes</B>
By David Jonas
The nation's largest airlines continue to be plagued by labor disputes, but the threat of any work stoppage has been greatly diminished by President George W. Bush's acceptance of a recommendation made by the National Mediation Board to intervene if it becomes necessary.
That intervention first would come in the form of a presidential three-member emergency board at the conclusion of a federally mandated 30-day cooling-off period now underway at Northwest Airlines, where management and the union representing the carrier's mechanics continue contract negotiations. Once activated, when the 30-day period expires on March 12, the presidential panel could delay a possible strike by another two months. The next step would be congressional action stemming from the PEB's recommendations, both parties mutually agreeing on contract terms or a worker's strike.
Analysts said presidential involvement would not only help the flying public by pushing back or even eliminating a strike threat, but also give management the advantage in negotiations.
Meanwhile, the impact on negotiations of last week's resignation by Northwest chief John Dasburg (see story, page 8) was unclear at press time. The mechanics, represented by the Aircraft Mechanics Fraternal Association, have been accusing management of dragging its feet during negotiations, particularly since Bush stated his likely involvement come March 12.
Doug Steenland, now Northwest's president, last week in a call with analysts, said he hopes to resolve the issue in talks with the union and NMB now set to resume March 7, but that Northwest "will accept and abide by the recommendations of the PEB," if negotiations reach that level.
Labor disputes in the airline industry do not exist in a vacuum; the outcomes almost always affect labor relations at other carriers. Said Deutsche Banc Alex. Brown analyst Susan Donofrio in a research note to investors, "We also think that Bush's decision to get involved also bodes well for the tone of current labor negotiations at Delta, American and United."
Nevertheless, Delta Air Lines' pilots are preparing to strike if negotiations fail. In a landslide, the 9,800 pilots represented by the Air Line Pilots Association, voted to authorize a strike once the union is legally able to do so. Of the 99 percent of eligible pilots who voted, 97 percent favored a strike, a return ALPA said was a record. Currently, ALPA and Delta management are in a self-designated 90-day negotiating period. Should talks fail to yield a new contract by this Wednesday, both sides will request that NMB proffer arbitration. That arbitration, if first agreed to by NMB but then declined by either ALPA or management, would set the clock ticking on a 30-day cooling-off period. Those developments could mean a Delta pilots' strike by April 1, assuming no presidential intervention. The carrier still is operating a slightly reduced schedule to compensate for pilots opting not to work overtime.
Meanwhile, a federal judge issued a preliminary injunction preventing the union from coordinating a no-overtime campaign, a tactic used by United Airlines pilots in achieving their landmark deal last summer. The union had until today to prove they were communicating the order to the rank and file, but also plans to appeal the injunction ruling in the Supreme Court.
Earlier, the union termed Delta's latest offer a "step in the right direction." That four-year-plus deal involves an approximate 17.5 percent pay increase on May 1, other retroactive increases dating to May 2001, preset annual increases no longer tied to company profitability, a two-tiered compensation arrangement for Delta Express pilots and reduced seating capacity on regional jets flown by Delta Connection carriers.
Though the union was encouraged that management eliminated the idea of tying pay to profitability, it still is not satisfied with separate, lower pay for Delta Express pilots who fly Boeing 737s, an aircraft type also operated in the mainline fleet.
Meanwhile, American Airlines and its flight attendants, represented by the Association of Professional Flight Attendants, are set to resume negotiations next week with federal mediators. Each side met separately with NMB officials earlier this month. Union members already overwhelmingly voted to authorize a strike, if necessary. Negotiations for a new contract have lasted more than two years, with compensation a main sticking point.
At United Airlines, the International Association of Machinists and management recently held talks in conjunction with NMB officials. Though no progress was reported, NMB said more joint talks will be scheduled in the near term. The union, representing the carrier's 15,000 mechanics and related workers, said it "remains convinced that we will not complete an agreement in the absence of a 30-day cooling-off period."
Simultaneous labor disputes at several majors "reflects the unhappy confluence of contract timing, very high labor expectations and increased management concern about a slowing economy," said UBS Warburg analyst Sam Buttrick. However, he said, it is "exceptionally unlikely that there will be overlapping strikes--or any strikes at all.