The dispute between American Airlines' management and its pilots appears to have set the tone for a year of discontent across the US that could help to fuel more strife elsewhere.

At presstime, American's management and the Allied Pilots Association remained locked in stalemate just hours away from the 15 February deadline for a strike.

Although American's troubles are expected to be the most acute, they are setting the stage for what is expected to be a year of similar disputes. Continental Airlines, Northwest Airlines, United Airlines and USAir all have to negotiate pilot contracts this year and indications are that no carrier is in for an easy time. United faces the most pressing challenge, after its pilots rejected their midterm agreement. TWA faces a similar problem, after the International Association of Machinists rejected management's offer on a midterm wage adjustment.

George Melas, analyst at BT Securities, sees a pattern. 'While the economic and competitive impacts of the rejections at United don't approach the magnitude of the setback at American, the signal organised labour is sending is clear: employees feel they deserve participation in the industry's prosperity,' says Melas.

Kevin Lydon, at Fitch Investors Service, agrees that labour relations across the US could be 'more tumultuous' this year, with the notable exceptions of Delta Air Lines and Southwest Airlines, which already have their pilots' contracts in place. 'You will not get the exact same reaction at the other carriers - American has had a history of volatile relations and I would say they would be the worst case - but the overall trend will spill over,' says Lydon.


Source: Airline Business