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The machinists, who were already paid a top of $3.52 an hour for servicing and repairing the 744 planes of the five airlines, demanded a 53¢-an-hour wage boost over three years, plus higher overtime rates, a shorter work week, company-paid health and pension plans, and a cost-of-living escalator. Accepted by the airlines but turned down by the union was the recommendation of a presidential fact-finding board that called for a 48¢-an-hour hike spread over 3½ years. By industry estimates, the union demands would amount to a 5%-a-year pay boost and would cost the five lines $114 million, nearly 60% more than the limit set by the presidential panel. That would just about wipe out the White House's battered 3.2% guideline for noninflationary wage increases and would goad all labor to push for similar raises this year and next.
Whatever the settlement, the passengers would ultimately pay for it in one form or another. The airlines depend heavily on today's soaring business to bring in enough money so that financing tomorrow's much more expensive planes will not saddle them with a crippling load of debt. Though airline profits rose last year to a record $367 million on revenues of $5 billion—and climbed another 20% in the first six months of this year—such prosperity hits been brief. U.S. airlines lost millions in 1961 as their effective new jets raised passenger capacity more swiftly than the demand of the day could fill it. Only in the past two years have airlines profits risen as high as the 101% on investment that the CAB deems reason able. That return reached 10.8% in 1964 and 11.8% in 1965, but over the past five years, the average has been only 61%.
The Managers. The reason why almost all airlines are thriving—or were, before the strike began costing them $7,000,000 a day in lost revenues—lies chiefly in new technology. Swift, safe and efficient beyond their creators' dreams, the jets have been embraced by the traveling public, and the carriers offer almost everything but LSD to lure customers aboard. But another important factor is the new generation of coolly professional managers, replacing the strong-willed early birdmen who led the industry from infancy to gianthood. The lineup:
> At United, George Keck, 54, up from the ranks of maintenance and operations, two months ago succeeded retiring William A. Patterson, who bossed the airline for 32 years. United is by many yardsticks (revenue, passenger-miles, fleet size, employment) the world's largest airline, but it has had to battle its way back from the disastrous results of a 1963 attempt to replace the traditional first-class-and-coach flights with a one-class service priced in between. The idea had sounded plausible. But competitors ran needling anti-egalitarian ads plugging their own frills for first-class status-and-comfort seekers. Having long since done away with the one-class experiment, United has recouped its share of the market. In the first four months of 1966, revenue rose 25% and profits more than tripled.