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Monday, April 23, 2001

Pressure points influence results of Comair talks


Trio of entities among big factors

By James Pilcher
The Cincinnati Enquirer

        When the Comair pilot strike began, analysts said pressure to settle would come from three basic areas:

        • Wall Street, meaning how both Comair and parent company Delta are faring financially.

        • The kitchen table, or how the pilots and their families are faring.

        • The ticket counter, or how badly has the public been inconvenienced and how many complaints has Comair received.

        Here's a look at each of the three and how they could affect the talks this week.
       

Wall Street
               Delta, which bought Comair for $1.9 billion in January 2000, reported that it had lost money in the first quarter, its first quarterly loss in six years. And it attributed $24 million in losses directly to the Comair strike, which took up just the last six days of the quarter. That equates into about $4 million in losses daily, because the company has kept paying benefits and salaries for its entire non-pilot work force.

        Using that figure, Delta has lost $112 million through today, the 28th day of the walkout. Comair officials have said that the two sides are $240 million apart in total compensation over four years.

        Delta's stock price closed at $43.61 Friday - down from its 52-week high of $56.56 reached on May 12, 2000.

        Delta's latest quarterly earnings report said that a loss of 12 cents per share could be attributed directly to the Comair strike.

        One airline expert, Miami University management professor David Walsh, said Delta may be more involved in the Comair dispute than people think because it is trying to figure out just what it will pay both its mainline pilots and pilots at Comair.

        Comair officials have admitted the strike has taken a toll financially, but would not give specifics on the cost. They also say they are not willing to give in to the pilots since the pilots' demands would hurt the long-term future of the company.
       

The kitchen table
               Based on figures provided by both Air Inc., an Atlanta-based pilot placement service, and the Air Line Pilots Association, Comair's 1,350 pilots are losing a total of $144,401 daily on the strike, about $4 million through today.

        In addition, Comair announced Monday that it was cutting 200 pilot jobs — including 100 turboprop pilots — and retiring 17 planes.

        Nine of those planes were turboprops and were due to be retired later this year, but the message was clear that the company was protecting itself while inflicting economic damage on the pilots.

        Company officials also said those job cuts wouldn't be rescinded in the near future, especially since Comair also put a hold on new plane purchases. The company added the cuts were not negotiable and were legal, falling under the category of “self-help” under labor law.

        Union officials say that the pilot group is as resolute as ever. Even though most of the pilots have three years or less experience and for the most part are making $29,000 or less, they have been saving for years and can continue to hold out, the union says. In addition, pilots in good standing with the union have begun receiving monthly strike benefits of about $1,400 per pilot from the national union.

        Still, labor analysts say that striking workers in general are bound to get antsy to get back to work, especially when the company starts cutting jobs and making threats of more cuts.
       

The ticket counter
               Going by Comair's pre-strike daily passenger numbers, 700,000 passengers have been inconvenienced or not been able to fly since the strike began. But that is based on a 25,000 daily passenger count, which no doubt has dwindled as pre-strike advance bookings have dried up.

        Company officials would not give current figures, but previously have said that 85 percent of those with Comair tickets have been reaccommodated, 60 percent of them through the Delta system. Seven other airlines have picked up the other 15 percent. That leaves 15 percent who have not been able to fly at all and have been issued refunds or delayed travel indefinitely.

        The company last week began canceling flights 30 days in advance, and won't accept advanced bookings during that time either.

        Several smaller cities served by the eliminated turboprop fleet could lose service when the airline restarts. That's because serving those cities — primarily in Florida — wasn't profitable, and the airline has said it could be looking at route cuts because of the reductions in pilots and planes.

        “Now that the regionals have started unraveling, people are really seeing the signs that something has to change throughout the system,” said Scott Reed, spokesman for the National Airline Passengers Coalition. “This really marks the beginnings of a crisis for travelers everywhere.”

       



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