Originally created 02/18/99

Judge grants delay in hearing against pilots



DALLAS -- A federal judge today gave American Airlines' pilot union more time to defend itself against contempt charges that stemmed from failing to halt a sickout that at one point grounded more than half the flights of the nation's second-largest airline.

The Allied Pilots Association had asked U.S. District Judge Joe Kendall to hear its side of the case before imposing damages. The union said it needed more time to rebut financial harm the carrier claims it suffered as a result of the job action.

The airline's lawyer, Dee Kelly, urged the judge to proceed, saying, "I frankly think they've had notice. The airline has suffered huge losses and we would like to show the court how much."

Kendall, who has promised a sizable fine against the union, continued the hearing until April 12. He also ruled that a temporary restraining order issued a week ago ordering the pilots to return to their cockpits will remain in effect through May 10.

"It's time to cool down and take the loaded guns away from each other's heads," Kendall said.

The union placed $10 million, or one-quarter of its assets, with the court on Tuesday in preparation for the fine Kendall promised on Saturday, when he ruled that the union did not do enough to prevent the sickout once he ordered pilots back to work.

The pilots' work action took place over 10 days and resulted in delays and cancellations for more than 600,000 passengers when about 6,000 flights were left at the gate. Flights, however, appear to be back to normal.

"Even if the airline is running normal, we think the union should share in the pain," Kelly said.

Doug Herring, vice president and controller for American, told the judge the carrier has lost an estimated $58.7 million in revenue from 4 p.m. last Wednesday to the end of Saturday. Wednesday is when Kendall ordered the pilots back to work; Saturday is when he held the union and two top board members in contempt and promised to fine them.

For the entire 10 days of the work action, losses "will easily exceed $150 million," Herring said.

Timothy Ahern, vice president of operations for AMR Corp., the airline's parent company, said that as of this morning 486 pilots were on the sick list -- down from 2,443 out sick on Friday -- and cancellations dropped significantly on Sunday.

Among other items presented in court today, American gave the judge a note it characterized as threatening that was believed to have been posted on a pilots' bulletin board on the Internet. The judge smiled as he read the message, which was not released to the public.

American pilots say they became disillusioned at the negotiating table with Fort Worth, Texas-based AMR. According to APA, the company had ignored their contract by purchasing Reno Air Corp. and not immediately increasing pay for all pilots affected.

Negotiations continued on the issue Tuesday, and the airline said it had offered movement on some of the core issues.

The company said it offered to immediately increase pay up to 56 percent for pilots of Reno Air, which was purchased by AMR in December. American also said it would shorten the overall period for training and integrating both airline operations and pilots.

Pilot union president Rich LaVoy said negotiators have agreed on a training and transition program that would take up to 18 months. The sticking point continues to be when Reno pilots will get their raise. American is willing to do it immediately; the union wants it to be retroactive to the day Reno was purchased.

Some Reno pilots' pay is half the $164,000 a year that an experienced American pilot is paid. AMR said the pilot union's demands to add Reno pilots to the higher pay scale quickly would cost as much as $50 million this year.

As the talks continued, American is expected to take steps to win back the business of passengers alienated by cancellations during a pilots sickout.

Experts say that because of high demand for seats, travelers shouldn't expect big fare cuts after this labor dispute. What's more, American cut back its spring flight schedules by 1 percent in anticipation that pilots would refuse voluntary overtime.

Randy Petersen, publisher of InsideFlyer frequent-flier magazine, said he expects the airline to use frequent flier miles as an apology rather than money.

"I don't think we're going to see a lot of big fare slashes. American is more conservative. They don't like to do things everyone else would match," he said.

John Hotard, a spokesman for AMR, said because of federal requirements he could not comment on whether there would be a fare sale.

To appease travel agents who have been overwhelmed by the changes in schedules, American will also pay commissions for tickets that were later refunded because of the sickout. Commissions are not usually paid in that situation.