American Airlines’ Pilots Set to Strike

The U.S. travel system braced for holiday-weekend chaos after American Airlines, the nation’s largest domestic carrier, and its pilots’ union failed again Thursday to agree on a contract that would prevent a pilots’ strike set for tonight.

But the top U.S. negotiator said late Thursday he was becoming more optimistic that a last-minute settlement might be possible. “I am hopeful,” said Kenneth Hipp, chairman of the National Mediation Board.

American’s 9,300 pilots plan to walk out starting at 9:01 p.m. PST if a settlement isn’t reached. If they strike, American plans to ground its 640-plane fleet that carries nearly one-fifth of the nation’s air passengers daily.

A strike would trigger national economic upheaval, and speculation is mounting that President Clinton will intervene just as he did when flight attendants struck American in 1993.

This disruption, coming at the start of the Presidents Day holiday weekend, “would be enormous because American serves such a significant chunk of the traveling public,” said Rich Barlow, a director of GRA Aviation Specialists, a consulting firm in Herndon, Va.

Airports where American has a big presence would be especially hard-hit, including Los Angeles, Chicago, New York, Miami, Washington and at Dallas/Fort Worth, where American not only dominates but is also headquartered.

Clinton said early this week that a strike “has huge implications for our country,” but so far he’s taken no action to block it. White House spokesman Mike McCurry said Thursday that Clinton “remains convinced” that both sides should solve the situation with the help of federal mediators but without the help of the president.

Asked if the White House would step in after a strike starts, as it did in 1993, McCurry replied: “I’m not going to speculate at all about what happens if there’s no agreement.”

Earlier in the day, American Chairman Robert L. Crandall used an appearance before a House subcommittee to reiterate that American will accept binding arbitration to reach a new four-year contract with the pilots.

American also used its Internet site to urge consumers to pressure the White House and Congress for arbitration before a strike, and provided the officials’ e-mail addresses.

But the pilots’ union, the Allied Pilots Assn., has opposed arbitration, which “is an admission of failure,” APA President Jim Sovich said in a statement Thursday. “We are not ready to make that admission.”

American and the APA--whose members earned an average of $120,000 in 1996, plus benefits--continued last-ditch talks in Washington but remained apart Thursday. Although Hipp voiced optimism, airline and union officials earlier were grim about prospects for averting a walkout.

Airline spokesman Chris Chiames said “the negotiations are basically at a standstill,” and APA spokesman Wally Pitts reiterated that a strike “is more likely than not.”

Tens of thousands of passengers and their travel agents, alarmed as the strike deadline grew nearer, have already tried to take evasive action either by snubbing American or re-booking their American flights with other airlines.

United, Delta and other major airlines, along with Amtrak, say that if a strike occurs they will accept passengers holding American tickets--but only as space permits. And the airlines have warned that seats on their planes won’t be plentiful.

American flies to more than 90 domestic cities and 68 international destinations, many in Latin America and the Caribbean. Its American Eagle commuter line--which the company also plans to ground even though its 2,200 pilots are represented by a different union and are not involved in the dispute--serves 88 U.S. cities and 27 foreign cities.

American said it will furlough most of its 90,000 workers without pay if the pilots walk out, and estimates a strike would cost it $50 million a day. A monthlong strike would wipe out the record $1-billion profit that American’s parent company, AMR Corp., earned during all of 1996.

Moreover, American each day flies more than 200,000 people--equal to the population of Des Moines--on 2,200 flights, and the inability of many of those passengers to get flights on other airlines would harm hotels and resorts, rental-car agencies, airport shuttle services and other enterprises tied to air travel.

Cruise ship lines in the Caribbean and ski resorts in Colorado were among those trying to help consumers find alternative air travel, lest the resort operators lose the business.

American also is a major cargo carrier, and shipments of U.S. mail, along with fruit, flowers and other goods that American moves between the United States and Central and South America, would also be affected.

American has been making preparations for a strike. It negotiated a new line of credit from its lenders, and now has a $2-billion war chest to help weather a walkout. For customers that made reservations but did not yet have tickets, American has been sending them tickets via overnight delivery so that the customers could get rides on other airlines.

American also canceled many of its overseas flights beginning tonight. Citing insurance concerns, the carrier said it didn’t want its airplanes sitting idle on foreign soil when its pilots walked out.

The strike deadline follows more than two years of often bitter negotiations between American and the APA.

They tentatively approved a pact last November in which American offered the pilots a 5% raise over four years and stock options. But the pilots themselves shocked both sides by rejecting the agreement last month. The APA later proposed that the pilots get an 11% pay hike over four years and more stock options than American offered.

And there was another big dispute over who will fly new, small jets that American plans to add to its American Eagle commuter fleet.

American wants the jets to be flown by the American Eagle pilots who currently fly the commuter line’s turboprop airplanes. Those pilots earn much less than their American Airlines counterparts and have a different union.

But the APA insists that its pilots fly the new American Eagle jets, because it fears that American ultimately will use the lower-cost planes on American Airlines routes--thus displacing its members.

American claims it can’t accede to the APA’s demands without eroding its competitiveness. With low-cost, low-fare carriers such as Southwest Airlines and Delta Air Lines’ new Delta Express division growing in strength, American says it must keep a lid on labor expenses.

Peltz reported from Los Angeles and Salem-Fitzgerald from Washington. Times wire services contributed to this story.