Profits in Strikes

Just as labor unions chip in money to help one another when they are on strike, most of the major and local U.S. airlines have a mutual aid pact to assist any contributor who is grounded by labor trouble. No company has benefited more from the pact than Northwest Orient Airlines, which has been shut down by strikes about one day in every ten since 1960. Last week Northwest settled still another strike, and though it did not do nearly as well as normally during the shutdown, it received so much in strike benefits that it actually showed a profit.

Northwest's angry pilots were out for three months. They finally agreed to a three-year contract calling for a 29% pay-and-benefits increase. The most junior officers' pay will rise from $15,564 a year to $18,504, and senior pilots' salary will soar from $60,600 to $66,816. The Air Line Pilots Association compromised its main demand that the company rehire all 1,619 pilots employed before the strike. It accepted Northwest's offer to rehire 1,425 immediately and set up a schedule for recalling the rest.

On the basis of company reports, the union estimates that Northwest collected about $39 million from other lines during the strike and showed a profit of $ 1,000,000 during the July-August period. The company puts its profits at $700,000, and notes that in the same period last year, when there was no strike, its earnings were about $14 million.

What is not in dispute is that Northwest did come out ahead during this strike--and others. In 1970, for example, the airline got $46 million in aid and showed a profit for the year of $44 million. In that same year, United Air Lines posted a loss of $40 million, but paid nearly $17 million to Northwest. Payments are figured on the basis of the "windfall" profits made by companies that carry the struck carrier's passengers and on a percentage of the contributing airlines' gross revenues. During the 14 years of the pact's existence, Northwest has paid only $4,000,000 into the fund, but the firm has collected about $90 million from it.

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