United, Pilots Reach Accord on Two-Tier Pay

United Airlines and its pilots reached agreement Friday night on a two-tier wage scale to severely limit the pay of newly hired pilots, the key issue in a strike that has crippled the nation’s largest airline for eight days.

But an immediate settlement was blocked by disagreement over how to resolve disputes that arose during the strike.

Hours after a compromise on the strike’s key economic issue had been announced, negotiators in Chicago continued working on a back-to-work agreement that is intended to balance the seniority rights of strikers with the job-protection assurances United made to the pilots it has hired since May 17, when 5,200 members of the Air Line Pilots Assn. walked off their jobs.

Talks May Break Off

David Pringle, United’s chief negotiator, vowed that the company “will break off (talks) indefinitely if we don’t get (a back-to-work) agreement tonight.”

Since the strike began, relations between the union and airline have been strained by United’s repeated public threats to “rebuild” the airline by hiring thousands of lower-paid pilots from other airlines if the strike were prolonged.

As a result of the acrimony, said United Capt. Dick Rogers, who heads the union’s Los Angeles operation, back-to-work issues could be harder to settle than the two-tier wage scale.

The strike, supported by all but about 270 of United’s pilots, forced the airline to slash its normal schedule of 1,550 flights a day to 209 at only 41 airports, creating anxiety for travelers to the Midwest, Hawaii and other areas.

L.A. Service Cut

United cut its service out of Los Angeles and San Francisco from 212 flights a day to 14.

The airline, which carries about one-sixth of all U.S. commercial passengers, had hoped to expand service by the end of May, but it announced Thursday that it would hold its base schedule at 209 flights through June 15.

That announcement was seen as an indication that United’s recruiting of new pilots was going more slowly than expected.

Resolution of the two-tier issue was announced by Helen M. Witt, head of the National Mediation Board. She refused to discuss the terms of the compromise, saying only, “The parties appear to have resolved the contractual issues over which they have been bargaining now for close to a year.”

The two-tier system of pay functions as a form of probation. A pilot joins the higher tier after several years with the company.

Four other airlines--American, Western, Republic and Piedmont--already have two-tier wage systems for their pilots. Two other airlines, Delta and TWA, hope to insert it in coming contracts, according to Peter Cappelli, a University of Illinois industrial relations professor who studies airline labor relations.

United, which had operating profits of $546 million on revenues of $6.2 billion last year, contends that it needs to limit the wages of new pilots in order to continue to operate profitably. It says that it must cut labor costs to keep its air fares competitive with American and Continental Airlines and new non-union carriers such as People Express.

‘Herd Mentality’ Seen

Cappelli said he believes that airlines are being driven by a “herd mentality” to adopt two-tier wage systems in an effort to impress the financial community, “which has apparently gotten it into its head that two-tier agreements are a symbol of a tight ship. I think there are a lot of other ways an airline could achieve cost savings.”

The effect of United’s proposal on new pilots would be dramatic. For example, a starting United pilot now makes $22,452 but rises to $60,456 in his fifth year. Management proposes that the starting pay for those hired under the new contract begin at $21,600 and rise to only $27,792 by the fifth year.

(Under the company’s proposal, newly hired pilots with considerable experience would enter United with a starting salary somewhere between that of new pilots with no experience and that of currently employed ones.)

United pilots said that they were willing to adopt a two-tier system but differed sharply with management on when the two tiers should merge.

‘Second-Class’ Workers

The union complained that, under United’s plan, it would take 20 to 25 years for a pilot hired after a new contract is signed to reach pay parity with a pilot hired earlier. It said that the company’s two-tier scale would create “second-class” workers and lead to potentially dangerous dissension in the cockpit.

The union said that it was willing to maintain separate scales for seven years, but it insisted that the scales merge in the eighth year. (Under the union’s contracts with Western, Republic and Piedmont, the scales merge in the sixth year.)

The announcement of a settlement on the two-tier proposal was surprising. A fifth day of strike settlement talks had begun Friday after nine unproductive hours Thursday, and there were signs that the parties were more likely to announce a deadlock than progress.

Two issues appeared to be complicating the back-to-work agreement:

--The status of 500 pilots whom United trained earlier this year, in anticipation of the strike. When the strike began, United offered them jobs but, in a development that surprised and delighted the union, only four came to work. The pilots’ union promised to protect those jobs, even though it is questionable whether a union can represent unhired pilots.

--The status of 65 replacement pilots United hired this week and sent to its training facility in Denver to learn company procedures. They were the first in what United vowed would be a wave of pilots rapidly brought aboard to expand service during the strike.

Priority for New Pilots

United emphasized that the new pilots were being given permanent jobs. And some United executives, echoing the theme of “rebuilding” the airline, said earlier this week that the newly hired pilots would be given priority over returning union pilots in selecting routes and positions held during flights.

Pringle said that “we want to make sure we keep our commitment with those pilots who crossed the picket line.”

John LeRoy, a union spokesman, said, “If that back-to-work agreement does not recognize the seniority of the (union) pilots, then that is going to be a problem.

“If the company wanted to put all the scabs at the top of the seniority list, that would be a problem.”

Times Labor Writer Henry Weinstein contributed to this story.