CLINTON CALLS FOR COOL-OFF PERIOD : BOARD TO TRY TO REACH AIRLINE DEAL IN 60 DAYS.

Byline: Angie Cannon and Robert A. Rankin Knight-Ridder Tribune News Wire

President Clinton stepped into the American Airlines negotiations at the last minute to avert a strike called early Saturday morning by American pilots.

``We're delighted it will continue to operate,'' said Don Carty, president of American Airlines.

Clinton declared a 60-day cooling-off period while an emergency board looks at the issues that brought the nation's largest domestic airline close to a shutdown over the busy presidential week holiday weekend.

``A strike would cause a severe disruption to both domestic and international air transportation. . . . It would be extremely difficult for other carriers to fill the void,'' Clinton said.

The last-minute decision came after a second day of continuous bargaining brought a few signs of progress.

In his action Saturday morning, Clinton imposed arbitration by establishing a Presidential Emergency Board, which will have 30 days to hammer out a settlement plan. The airline and the pilots then have another 30 days to consider the plan, and during that 60-day period there could be no strike or lockout.

If both parties agree to accept the board process as binding, they will be bound by law to abide by the arbitrator's ruling. If not, after the 60-day period, the pilots will be free to strike and the airline free to lock them out.

No emergency board has been appointed to resolve a major airline dispute since 1966.

As the nation's largest domestic carrier, American Airlines handles about one-fifth of the country's air traffic. The Transportation Department estimated that a strike would cost the U.S. economy up to $200 million a day and would strand up to 40,000 passengers daily.

But the main burden of a strike would have fallen on the 100,000 American employees other than pilots, particularly at hubs in Miami and Dallas. If a strike had continued, company officials said, other employees would have been put on emergency leave without pay.

Hundreds of businesses that rely on travel and tourism also would have been hurt.

At airports across the country Friday, pilots prepared for picket lines and people planning to fly American over the weekend were scrambling to make alternative arrangements.

Negotiators for the company and the union met with a federal mediator in a Washington hotel all day Friday, after meeting around the clock Thursday.

After 30 hours of continuous bargaining, chief federal mediator Kenneth Hipp emerged midafternoon to say that the talks were entering ``a very critical phase.''

Officials of both sides were guarded in their predictions earlier Friday.

``Progress is coming, but it is coming slowly,'' said Chris Chiames, American spokesman.

James Sovich, president of the Allied Pilots Association, which represents American's 9,300 pilots, characterized the talks as ``slow and difficult.''

``We've made significant progress on insignificant issues,'' he said.

The pilots, who earn an average of $120,000 a year, want 11 percent pay raises through the year 2000 as well as increased stock options, demands that many workers find hard to sympathize with. The company has offered 6 percent raises and decreased stock options.

But the biggest point of contention appears to be a company plan to expand its commuter airlines, American Eagle, and to fly those commuter jets with lower-paid pilots from another union.

The American pilots' union opposes adding more medium-size jets to American Eagle. They fear that the commuter pilots, who earn an average of $35,000 a year, ultimately will take over many of the longer routes.

On Thursday, the American pilots' union offered to accept lower pay for flying the regional routes if the company accepted its other demands. But the company says it doesn't want American pilots flying the new routes.

``Over the past few years, we've seen more and more of our jet flying replaced by propeller-driven airplanes on a lot of our shorter routes,'' Capt. Wally Pitts of the Allied Pilots Association said Friday on ``Fox Morning News.'' ``We would like to see the new generation regional jet flown by American Airlines pilots on American Airlines routes with American Airlines employees.''

Tim Smith, a company spokesman in the Fort Worth, Texas, headquarters, said in a taped message that it does not make economic sense for American pilots to fly small 50-seat jets.

``The regional jet issue is not an outsourcing issue,'' Smith said. ``It is a competitive issue. . . . Regional jets will not cause any job loss among American pilots.''

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Photo

Photo: American Airlines pilots picket at Miami International Airport. According to estimates, a strike would have cost the U.S. $200 million a day.

Associated Press