REMEMBERING THE DELTA DOT. THE SUMMER FROM HELL.

As a student of the airline industry who has spent considerable time in distressed labor contract talks, I keep asking how in the hell will the industry absorb/pass through the cost increases occurring within nearly every line item on the income statement? I understand that a labor shortage is a new wrinkle driving much of the increases, but...

The 1990s is the only period over the last 40 years that has a feel like this one.

The first half was defined by a recession and the Gulf War. Airlines were bleeding and won concessions from labor. The second half of the decade saw increases in both traffic and prices paid. That perfect combination turned a bleeding industry into one earning record profits. It was time to repay labor.

DL was about to introduce the 777 into its fleet and needed to negotiate a pay rate. The "Delta Dot" was born. The result set the pattern bargaining bar high for widebody pay rates. UA pilots subsequently set a higher bar in pattern bargaining using the dot.

During that summer of 1999, the industry pattern bargaining environment for pilots improved significantly. The "Delta Dot" was used to extrapolate widebody pay rates at UA that became part of a new contract that increased rates as much as 28.5 percent.

''We are very, very pleased with this tentative agreement,'' said Capt. Rick "Mad Dog" Dubinsky, chairman of the UA branch of ALPA. ''By any standard it is truly industry leading.'' A new agreement at DL would follow and so pattern bargaining goes. We are about to see just what it means today.

Dubinsky made clear to UA CEO Jim Goodwin during the talks: ''We don't want to kill the golden goose; we just want to choke it by the neck until it gives us every last egg.'' During these negotiations UA's operations suffered for any variety of reasons including a very bad year for thunderstorms.