# Weekly Cabinet Report for

Week of April 30, 2001

Susan McDermott

Deputy Assistant Secretary for Aviation

and International Affairs

## The Secretary

### ECONOMIC GROWTH AND TRADE

**Poland:** Negotiations between the United States and Poland aimed at
completing work on an open-skies aviation agreement will take place in
Washington, May 30-June 1. During an earlier round of talks held in
March 1999, the two governments reached agreement on most aspects of
open skies, except for transition provisions and certain technical
issues needing interagency review by Polish authorities.

**Russia:** Delegations from the United States and Russia met on April
17-19, in Washington, to discuss revisions to the Annexes of the 1994
Air Transport Agreement, including operations over the cross-polar
routes and special arrangements for air services between Alaska and the
Russian Far East (RFE.) The two sides did not agree on revisions to the
Annexes, but agreed to meet again in September in Moscow. In the
Memorandum of Consultations Russia agreed to permit, on an
extra-bilateral basis, airlines of the United States to continue current
operations (70 flights per week) over the cross-polar routes until
September 30. Additionally, Russia indicated its willingness, on an
extra-bilateral basis, to consider applications from U.S. carriers for
scheduled service between Alaska and Anadyr, Lavrentiya, and Provideniya
in the RFE.

**U.S.-Israel Third-Country Code-Share Services:** On April 18, by Order
2001-4-24, the Department tentatively selected American Airlines, United
Air Lines, and Northwest Airlines to serve Israel via Europe under
code-share arrangements with their foreign carrier partners. American
would operate 14 weekly flights via Zurich with Swissair; United 17
weekly flights via Frankfurt and Munich with Lufthansa; and Northwest 8
weekly flights via Amsterdam with KLM. Under an agreement reached in
January between the United States and Israel, two U.S. carriers may
operate third-country code-share services effective immediately; a third
carrier may begin such operations effective April 1, 2002. Under the
Department's tentative decision, American and United would be awarded
the currently available opportunities and Northwest the 2002
opportunity. Objections to the Department's tentative decision are due
April 30 and answers to objections are due May 7.

**Delta Air Lines' Labor Dispute:** The National Mediation Board (NMB)
on March 27^th^ declared an impasse in Delta's negotiations with its
pilots' union, the Air Line Pilots Association (ALPA). A 30-day cooling
off period began March 30^th^ and would end at 12:01 a.m., April 29^th^.
The Department delivered a comprehensive strike impact assessment to the
NMB on April 16^th^ for consideration in its recommendation to the
President concerning establishment of a Presidential Emergency Board
(PEB). Mediated contract negotiations were held April 18 to the 22^nd^.
On April 22^nd^ the parties reached a tentative collective bargaining
agreement on an industry-leading contract. Although details are scarce,
according to ALPA, the tentative contract includes pay increases of 24
to 34% between now and 2005, pay increases of 63% for the pilots at
Delta Express, and improvements in retirement, job security, and
vacation benefits. According to Delta, the contract agreement is
essentially the United pilots' September 2000 contact plus 1%, rather
than the United-plus 6% contract that had been sought by Delta's ALPA
unit. Also, Delta agreed to broadening the scope clause by limiting the
carrier's acquisition of regional jet aircraft to 50-seaters, except it
could add 70-seat regional jets (RJs) if certain growth thresholds are
met. The contract will increase Delta's pilot costs by about \$2 billion
over four years. The tentative agreement is subject to ratification by
the rank and file. Ratification could take up to 60 days.

**Comair Strike Situation:** Comair, a subsidiary of Delta Air Lines,
and the Airline Pilots Association failed to reach a new labor agreement
by the end of a 30-day cooling-off period, and at 12:01 a.m. March
26^th^ Comair's pilots began a strike. The Comair strike is now in the
fifth week. Mediated labor talks between Comair and ALPA are scheduled
to resume April 25^th^ to 27^th^ under the auspices of the National
Mediation Board