(FORTUNE Magazine) – LORD KNOWS, it was fun while it lasted. You were one of the elite, an Air Force or Navy flier who moved up the ranks with top-gun swagger. Then you slid into a cockpit for Delta or American, pulling down a heavy six-figure salary for maybe 80 hours a month in the air. Plenty of time to work on your backhand or your handicap or whatever. Everyone admired you, from wide-eyed kids who tossed salutes as they boarded to equally wide-eyed airline executives who paid you so well and blithely passed the tab to the customers. Strap in. Sit back. Relax. Captain Right Stuff is taking everyone for a ride. Those days are gone. Deregulation changed the rules. Pilots, along with the rest of U.S. airline employees, are confronting combative managers who demand deep wage cuts and work rule concessions. The pilots' principal union, the 40,000-member Air Line Pilots Association (ALPA), is fighting back, as any union might be expected to do. But this is no ordinary union. ALPA has more in common with, say, the American Medical Association than with the Teamsters or United Auto Workers, or even with other airline unions. ALPA members average over $80,000 a year, and a few senior captains rake in more than $200,000. Union President Henry A. Duffy, 52, a Delta captain, is something of a champ. ALPA pays him $225,000 a year, including allowances for personal expenses. His salary is based on the pay of the highest-paid pilot in the union. Nor do the pilots exactly stand shoulder to shoulder with their brethren in the labor movement. They have outraged other airline unions by crossing picket lines when it suited them, and they have sometimes cut private deals with management at the expense of the machinists and flight attendants. Last summer, in order to protect their own seniority, United's pilots blocked the airline's bid to acquire Frontier. Frontier promptly went bankrupt, and 4,700 employees -- including 520 ALPA pilots -- lost their jobs. ''In the final round we were sacrificed. They were looking out for their own interests,'' says Lorraine Loflin, chief negotiator for Frontier's flight attendants' union. ALPA members play rough in other ways. During a month-long strike against United last year, ALPA pilots rented a hotel room near O'Hare Airport in Chicago and trained binoculars on the runways. By recording the serial numbers of the United planes still flying, the union was able to trace the pilots' identities through airport records. Then ALPA members tried to badger them into honoring the walkout. The union, based in Washington, D.C., is girding for more battles. By hiking dues from 1.35% of annual wages to 2.35%, it is building a $100-million war chest to support strikes. It is hard to see how ALPA can prevail in the long run. ''The pilots seem to think that if they stick their heads in the sand, all this bad stuff will go away and things will return to the good old days,'' says David L. Pringle, United's senior vice president for human resources. Leaving aside the unlikely possibility that Congress will put airlines back under its regulatory thumb, market forces will keep pushing airlines to cut costs. As one Wall Street investment banker familiar with the industry puts it: ''If you've got someone flying a plane for $150,000 a year and another guy doing the same thing for $75,000 a year, the free market has a way of eliminating the $150,000 guy sooner or later.'' Such concerns were unthinkable until the early 1980s, when the industry's new economic realities began to appear. In 1982 Frank Lorenzo, 46, the implacably anti-union chairman of Texas Air Corp., acquired Continental Airlines. He filed for bankruptcy, then immediately reopened Continental as a non-union carrier paying lower wages. ALPA called a strike, but hundreds of Continental pilots, including some newly hired ones, crossed the picket lines. Things turned ugly. Someone torched a barn on the property of a nonstriking pilot in Colorado. A bloody elk's head smashed through the front window of another nonstriker's house. Two strikers were arrested when police caught them carrying pipe bombs, disguises, and maps marked with the locations of nonstrikers' homes. One of those arrested had previously taken off his uniform pants and marched through the Houston airport with a sign on his back that said: WORKING FOR LORENZO AT HALF-PRICE IS LIKE BEING HALF-DRESSED. IT'S STUPID. CONTINENTAL continued to fly, and the ineffective strike sputtered on for more than two years until ALPA finally authorized those pilots who were still striking to apply for their old jobs back at the lower pay scale. It was a crushing defeat, and ALPA's national leaders realized that in Lorenzo they had acquired a formidable foe. ''We would rather have peace,'' says Duffy. ''But if you've got somebody that is just hellbent to destroy you as a union or run you off the property, you're going to have to take him on with every traditional labor practice there is.'' Duffy and his pilots were soon tangling with Lorenzo again, and this time they managed to thwart him. In the spring and summer of 1985 the Texas Air chief seemed to be close to winning a spirited battle against several ( contenders for control of TWA. But ALPA officials at the carrier offered financier Carl Icahn a deal in which they would take a 26% cut in pay and benefits in exchange for a block of stock. Icahn was not exactly known as a friend of labor, but he seemed better to the pilots than Lorenzo. The concessions allowed Icahn to top Lorenzo's offer. By carefully planning the strike against United, ALPA managed to mostly shut down the giant airline. The union set up centers around the country to provide emergency cash and counseling services for anxious pilots and their families. The 560 or so new pilots United put into training to help break the strike refused to cross picket lines. On the other hand, United showed its power too. Despite losses of $940 million, United stuck to its demand for a two-tier wage system like the one American Airlines had won from its non-ALPA union two years before. Eventually the pilots agreed to United's two-tier system, though in slightly watered-down form. The ALPA pilots outsmarted themselves during negotiations with Eastern Air Lines earlier this year. Management, burdened by huge debt and buffeted by non-union competitors, had been demanding deep wage cuts. The pilots balked even when they learned that in the absence of wage concessions Eastern might sell out to Frank Lorenzo. Hiring the investment banking firm of Lazard Freres to find another buyer, they continued to hold out until it was too late to block Lorenzo's bid. Eastern's unions made a final effort to find another alternative in early October, but the Transportation Department has given its approval to the deal and it seems likely to go through. Some of Eastern's other unions are still fuming over the pilots' intransigence, and their anger seems justified. According to John Simmons, a Massachusetts labor relations expert who monitored the Eastern talks, the unions failed to fend off Lorenzo in large part because ALPA early on refused to join the other groups in a collective effort. ''The pilots seem to feel that they're smarter than the managers,'' says Simmons. ''They think they can run the airline better, and this attitude -- call it professional arrogance -- almost guarantees that they'll be unable to sit down with the other unions. And if you can't cooperate with your brothers, then you've got real trouble.'' The pilots have annoyed their colleagues even in some of the recent mergers and takeovers that have proceeded fairly smoothly. One basic sticking point: ALPA negotiators often insist everyone take the same percentage cut when wage concessions are being negotiated. A $150,000-a-year pilot might be pinched some by a 10% or 20% cut. But the $30,000 mechanic or the $18,000 flight attendant could have trouble surviving. ''If they're going to be a union, they are going to have to stop being self-centered and support basic labor principles,'' says William F. Genoese, director of the Teamsters' airline division, which represents some flight attendants, among other airline workers. Sometimes ALPA locals wind up in conflict with each other. When the crunch came during the United-Frontier negotiations last summer, the ALPA unit at United made it clear that even fellow pilots were not worth saving. If the merger had gone through, some Frontier captains would have displaced United pilots on desirable routes once the two seniority lists were blended. ''Our guys saw it from a completely selfish point of view,'' says David Pringle of United management. ''There was nothing in it for them, and so a lot of people are out of work.'' The ubiquitous Frank Lorenzo subsequently agreed to acquire Frontier and its parent, People Express, and many of the laid-off employees may eventually be absorbed into his expanding empire. But most of Frontier's employees have been grounded since the carrier ceased operations at the end of August. Duffy is aware that ALPA has an image problem with other unions and, to some extent, with the public at large. Occasionally it supports pro-labor legislation on Capitol Hill. ''Some of the things we testify about are directly related to our business,'' says Duffy. ''But some have to do with good old-fashioned unionism.'' ALPA also backed off from trying to organize the air controllers when other unions within the AFL-CIO claimed prior jurisdiction. The pilots did not support the illegal, ill-fated controllers' strike of 1980. But ALPA's national leadership now backs the rehiring of some former controllers, charging that the air control system is dangerously understaffed. The union tries to win public approval by stressing its air safety research. ALPA has sophisticated testing equipment in a sleek office building near Dulles Airport in Virginia. But even its safety work sometimes smacks of self-interest. The union often uses its laboratory to challenge allegations of pilot error when an accident takes place. ALPA technicians worked ten years on one case involving a Piedmont pilot accused of damaging his aircraft during a landing. By enhancing tapes made by voice recorders in the cockpit, the union was eventually able to prove that the pilot had followed proper procedures. When ALPA officers speak out on safety issues, they often seem to be simply criticizing management. Duffy thinks air safety has been compromised because of the economic pressures brought on by deregulation. He ticks off some of the recent moves he says airlines have made to cut costs: eliminating walk- around inspections by mechanics before each flight, calling for reduced amounts of reserve fuel on some flights, removing life rafts to lighten the aircraft and save fuel. While Duffy is correct about these changes, the Federal Aviation Administration and the airlines argue persuasively that safety has not been compromised by any of them. A spokesman for American Airlines points out that pilots continue to make the preflight walk-around. Fred Farrar, a spokesman for the FAA, says the government enforces generous reserve fuel standards. As for life rafts, 14 carriers have sought and received permission to take them off aircraft over the years. But the FAA insists it grants waivers only on over-water routes that are close enough to shore to enable a disabled plane to reach land, such as the New York to Miami run along the East Coast. ALPA's safety research is now matched by economic research. ALPA has a team of staff economists who carefully chart traffic flow and financial changes at each of the major airlines. The idea is to be prepared with independent financial analyses when the union representatives sit down with management to negotiate new contracts. The union also has a team of lawyers and negotiators who work with local units around the country and provide backup support at contract talks or during grievance proceedings. Seth Rosen, the chief of ALPA's negotiating team, argues that the consolidation the industry is now going through will help pilots regain their old power. When airlines become huge, he says, they have trouble operating during a strike, as the United case proved. He even thinks it would be possible to call a nationwide strike, with pilots at several airlines going out at once. But surely his view is too rosy. Could the fractious locals ever get together? And as consolidation picks up speed, Frank Lorenzo is bound to wind up as one of the industry's biggest players. He most likely will soon be running the largest airline operation in the U.S., with about 20% of the traffic. He will no doubt squeeze down his costs, sometimes at the expense of his employees' wage scales. He could, for example, limit the damage of a strike against Eastern by picking up some of the traffic on his non-union lines. Lorenzo in turn will put added pressure on his big competitors to bring down their costs as well. FOR MANY PILOTS, new stress about their future has brought on some profound personal changes. As a group, airline pilots have traditionally been a highly conservative bunch with Establishment values. Mostly prosperous former military officers, they have by and large supported Ronald Reagan and the Republican party. But now, bloodied in their struggles against airline management, many of them have turned against the current Administration because of what they perceive as antilabor bias. Some of the same pilots who once basked in the glow of an indulgent management have become firebrands. ''We've got people out there who want to shut down the whole world,'' says Duffy. That attitude will only heighten the labor-management tensions in the airline business today. Nor will the ALPA militants impress their colleagues in other unions, most of whom still wonder whether they will ever share a common view with a group that has had such a merry time of it for so long. A consultant to other airline unions likes to tell of an acquaintance, an Eastern Air Lines captain, who recently retired in disgust at the age of 52. The job isn't what it used to be, the intrepid pilot pronounced. He used to go out with movie stars, and now he has been reduced to dating flight attendants.

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