The Mutual Aid Pact

In 1958, the airlines entered into the Mutual Aid Agreement (MAA), also called the Mutual Aid Pact (MAP), which amounted to a self-insured strike fund. This airline cooperative agreement was to be in place for the next 20 years, until deregulation. Under this arrangement, the largest nine trunk carriers in the United States contrib­uted to a fund from which amounts were paid to struck airlines to defray losses directly attribut­able to strike action. During the initial stage of MAP, the period 1958 to 1962, struck carriers received only “windfall benefits”—relatively small amounts equal to nonstruck carriers’ increased revenues realized due to the strikes. In the second stage of MAP, from 1962 to 1969, the plan assured that a struck carrier would recover at least an amount equal to 25 percent of the struck carrier’s normal operating expenses. In the third stage, between 1969 and 1978, the fund paid a struck carrier between 35 and 50 percent

of such expenses. At the beginning of the third stage, in 1970, local service carriers (feeder air­lines) came into the program, along with the trunk carrier Western Airlines.

The major beneficiary of the strike insurance was Northwest, which received over $187 million, followed by National ($120.1 million), and TWA ($37.1 million). The three major contributors to the fund were United, American, and Eastern, none of which had actually benefited from the fund.

The unions fought the MAP from its incep­tion in 1958, first before the CAB, which had to approve the plan, next by lobbying Congress, then by litigation brought in the courts, and finally in the collective bargaining arena. The unions lost on all fronts, and the MAP remained in force until the Airline Deregulation Act (ADA) passed Con­gress in 1978. The ADA provided that the MAP as approved by the CAB would terminate, and that any subsequent plan entered into by the air­lines would be constrained by very specific rules
and requirements. Thus far, the provisions of the ADA have effectively terminated the strike insur­ance fund of the airlines.

It should be noted that the MAP was used to great advantage by Texas International beginning with Frank Lorenzo’s takeover of that airline and during his battles with that airline’s unions in the early 1970s. During the period 1970 to 1974, Texas International received over $11 million from the fund, while paying in only $732,000. Rumblings of discontent over Lorenzo’s activi­ties were heard even from the other airlines.