United Pilots Walk the Line

By Barbara Rudolph.

Frazzled travelers accustomed to racing through airports, missing connections and losing luggage had something else to worry about last week. United Airlines, which normally carries some 120,000 passengers on 1,500 flights daily, suspended virtually all its service after 5,000 pilots went on strike. Industry observers are keeping a close eye on United, since its final settlement could set a precedent for other airline negotiations. "It's going to be a watershed development," said Alfred Norling, an analyst with Kidder Peabody.

Thousands of people traveling on business or to weddings or graduations were idled, and airports around the U.S. were in chaos. "It's a zoo out here," said a policeman at Chicago's O'Hare International Airport last Friday morning. The Baltimore Orioles baseball team was among those stranded at O'Hare Thursday night. At La Guardia Airport in New York City, United tried to persuade other airlines to honor its passengers' tickets, but that did not always work. American Airlines refused to honor the United ticket held by Larry Scweber of Portland, Me. He wanted to go to Tulsa, but American told him that United had not put down the full fare. "Now my baggage is on the 9 a.m. flight to Tulsa," he said. "I'm angry."

The largest carrier in the U.S., United faced its first pilots' strike since 1951. The issue that divides the airline and the people in the cockpit goes beyond a dispute over salaries or fringe benefits. At stake is a so- called two-tier wage system that would put new employees on a different pay scale from present ones. Under the United proposal, the starting salary for new pilots would drop from $22,452 to $21,600. In addition, newly hired pilots would remain on lower pay scales for the roughly 20 years that it takes to reach the rank of captain. Some senior 747 captains at United now earn $154,000 a year.

Two-tier salary agreements are becoming widespread in U.S. labor contracts. Among airlines, the plan is now used at American, Frontier and Piedmont. Those airlines complained that because they paid much higher salaries, they could not compete against new, low-overhead airlines like People Express. In 1983, labor costs represented 37.5% of American's operating expenses, as compared with 20% for People Express.

United pilots argue that the proposal could cause troubles in the cockpit. Joseph Leroy, a 727 captain, says the two-tier system would bring "great dissension" because people would be getting different pay for exactly the same work. Says he: "The cockpit depends on mutual respect and trust. We cannot afford that kind of trouble." The pilots also cite a long list of wage and benefit concessions they have made over the past several years. Finally, the pilots point to the airline's 1984 operating earnings of $564 million. It was United's most profitable year ever.

In the competitive airline industry, however, highflyers often suddenly crash to the ground. United Chairman Richard Ferris insists that his airline ; cannot afford to fly without a two-tier wage policy. Although pilots have not traditionally staged long walkouts, both sides last week seemed to be digging in for a tough fight.

With reporting by Lee Griggs/Chicago and Timothy Loughran/Boston