AIRLINE'S USE OF SMALL JETS CAUSING FRICTION.

Byline: The New York Times

The bitter confrontation between American Airlines and its pilots union has its roots in a growing innovation in air travel - small jets - that the company wants to use on many routes.

Also known as regional jets or commuter jets, these aircraft are replacing turboprop planes on flights that have not usually attracted enough passengers to be served by larger jetliners.

While popular with travelers - who like the jets' speed and ability to fly above turbulence - these small planes are seen by the unionized pilots as a way for American Airlines to replace many of the larger jets, as well as their jobs.

But American's parent company, the AMR Corp., continues to insist that the pilots at its American Eagle subsidiary, who earn less, must fly these jets if the company hopes to compete profitably with other carriers that already fly them.

The intransigence of both sides on the issue goes a long way toward explaining why they were willing to bear the heavy cost and disruption of a strike, which was averted for 60 days when President Clinton intervened early Saturday.

To a degree, the dispute at American Airlines is similar to the labor strife that resulted from significant changes in the steel and telecommunications industries. In those industries, new technology, like the steel industry's mini-mills, allowed companies to operate more efficiently with fewer workers.

By all accounts, the small jets are rapidly changing the complexion of the airline industry for many travelers. Some industry experts consider the introduction of the small jets to be similar to improvements that enabled aircraft to fly with fewer engines and smaller cockpit crews.

``The airline industry has always been able to provide travelers lower prices as a result of upgrades in technology,'' said Candace Browning, an airline industry analyst at Merrill Lynch & Co., who estimated that half of all commuter airline fleets will be small jets instead of turboprops in 10 years.

The regional jets cost about $20 million each, compared with $35 million for a Boeing 737 that seats more than 100.

These jets are in many respects at the leading edge of a shift in the airline industry toward more point-to-point service. Although the industry has evolved in the past two decades around the notion of feeding passengers into big hub airports that require them to take a second flight to their destinations, airlines are also competing increasingly by offering more direct service. The small jets play into this strategy, since they are able to fly longer distances nonstop than turboprop planes, although not as far as larger jetliners.

The small jets are the latest tool at the airlines' disposal to serve routes that do not generate enough traffic to justify flights by larger aircraft.

Assessing the long-term impact of the regional jets if they were placed into service in American Eagle or American is a matter of considerable debate between American and its pilots, who are represented by the Allied Pilots Association.

And their differences on the issue undoubtedly will continue to be a sticking point over the next two months.