UAL Contract OK'd, Raises Bar

<B>UAL Contract OK'd, Raises Bar</B>

By David Jonas

The tentative agreement between United Airlines and its pilots was given the green light by union leadership, paving the way for a vote by the rank and file. If approved when ballots are counted next month, as several industry observers expect, the four-year pact would cost United hundreds of millions in salary compensation and prompt other labor groups, both within United and pilots at other carriers, to review their own contracts.

Indeed, the new United contract may affect ongoing voting by American Airlines' pilots, represented by the Allied Pilots Association, on their tentative deal reached in July. In its current form, that agreement includes a 5.5 percent pay increase--compared with a 28 percent increase in the United deal--elimination of a $45 million fine levied against pilots for a February sickout and the expanded authority for 50-seat regional jet flying at American Eagle. Printed reports also said American chief executive Don Carty has agreed to open talks early on a new contract after the tentative deal expires in August 2002. Ballots will be counted Wednesday.

Delta Air Lines' pilots--represented along with their United counterparts by the Air Line Pilots Association--staged a rally in Atlanta voicing displeasure with the pace of their year-long contract talks. Industry observers expect that group to demand terms similar to those in the United deal.

Just about over one hurdle, United faces another with its 15,000 machinists represented by the International Association of Machinists and Aerospace Workers. The National Mediation Board has assigned a mediator to help management and the union negotiate a new contract. The machinists most recent contract expired in July, as did contracts for 30,000 ramp workers, reservationists and customer service agents.

Meanwhile, in an effort to pacify customers angered by disruptions, United last week launched a fare sale slashing prices on many domestic business routes by as much as 55 percent. Fares for some international flights also were reduced, though not as much.

While less restrictive than usual, these fares still require a seven-day advance purchase and a Saturday-night stay. Sample roundtrip fares include Chicago-New York, $198; Boston-Denver, $288; Los Angeles-New York, $598; and New York-London, $228. To take advantage, tickets must be purchased by Friday for travel through Dec. 14.

Back at American, management and the Association of Professional Flight Attendants returned to the bargaining table last week, joined by a federally appointed mediator. The flight attendants' contract became amendable in November 1998 and a tentative deal was defeated about a year ago.

Also, flight attendants working at the Delta Connection carrier Atlantic Coast Jet last month authorized the Association of Flight Attendants to represent them.

With the United pilots deal setting the tone for higher labor costs throughout the industry, the end result is likely to be even higher airfares as carriers look to recoup those costs. That does not bode well for corporate travel buyers, who already are facing fare hikes (see story, page 1).