Airlines: Back to Work Through an Open Gate

Six weeks after it began, the biggest and costliest strike in U.S. airline history ended last week with a labor triumph. The 35,400 striking members of the International Association of Machinists not only slapped down Lyndon Johnson's personal efforts at peacemaking, but won a settlement so lavish as to threaten the whole economy with a major round of wage-price inflation.

Somewhat grudgingly, the strikers voted at week's end to accept an 18% raise in pay and benefits over three years and to return to work at five airlines that normally carry 60% of the nation's air traffic. That 4.97%-a-year boost shattered what little was left of the President's 3.2%-a-year guideposts for restraining wage and price increases in the inflation-threatened U.S. economy. More ominously, the settlement opened wide the gate for other unions with 2,250,000 workers, including those in such key industries as electrical equipment, autos, trucking, clothing and rubber, to demand and get as good or better gains in contract negotiations scheduled between now and the end of 1967.

The Casualties. By Government and industry reckoning, the 43-day strike cost the U.S. economy at least $3 billion; it was the nation's most serious strike since the 116-day steel stoppage in 1959. The five grounded airlines—United, TWA, Eastern, National and Northwest—lost $335 million in revenue, a presumptive $28 million in profits.* Their employees—not only the machinists but also some 42,500 laid-off pilots, stewardesses, office and reservation clerks—missed a total of $68.8 million in pay. The federal, state and local governments lost some $45 million in tax revenue. The tourist indus try, expecting one of its busiest and most profitable years, was hit even harder than the airlines, lost an estimated $1.6 billion. Occupancy in leading Puerto Rico hotels fell 25% below normal; some Miami Beach hotels, shops and restaurants were half empty. American Express reported a sharp drop in travel bookings for the fall and winter. California flower growers, source of a quarter of the nation's floral supply, and dependent on air freight to deliver their fragile crop, lost $1,000,000 a week in sales to out-of-state customers.

In all, some 7,000,000 would-be passengers were grounded, delayed or forced to revise their plans. Such frustration fell most burdensomely on 16,000 TWA travelers temporarily stranded in Europe. The only strikebound line that flies across the Atlantic, TWA loaded other airlines with its strandees—a move that added $1,000,000 a day to the nation's balance-of-payments deficit. Even so, some 1,500 Americans were still looking for a way home last week, including 250 at Shannon, Ireland, and about 400 in London, where a party of Massachusetts schoolteachers bedded down on airport couches. The strain in Spain was mainly to get aboard Iberia Airlines planes from Madrid to New York. Last week police quelled one fracas in which 19 irate tourists threatened to slug counter attendants and then stormed the runway gates when told that their supposedly confirmed reservations could not be honored.