These are challenging times for the airline industry and the entire aviation community – including the FAA and its employees. As we all can appreciate, we are currently experiencing the safest period in aviation history. But despite the rise in traffic, the industry that we oversee is continuing to experience massive losses. The figures do not bear repeating. Declining industry revenues have also meant declining receipts for the major source of FAA funding, our aviation trust fund.
As the system gets more congested, the challenge for the FAA is to reduce delays, maintain our already remarkable safety record and develop the next-generation air traffic system – one that uses satellite and GPS technologies and can handle much more traffic.
But to meet this challenge, the FAA simply must control its escalating costs. Our biggest costs are our labour costs, which account for 80% of the FAA's operating budget. If the FAA is unable to prevent continued escalation of these costs, we will not be able to make the improvements needed to increase safety and meet future demand in a changing aviation system. We need to find a solution that is fair to controllers, fair to taxpayers and fair to the flying public.
We have an historic opportunity to make changes that will benefit the agency, the flying public, and all taxpayers. The FAA's 15,000 air traffic controllers account for the agency’s largest labour costs.
THE 1998 DEAL
We have spent the last several months analysing the 1998 agreement in great detail, costing out all of its 106 provisions, and determining what they actually mean to the FAA in practice. Candidly, we were dismayed by what we found. We cannot afford an agreement like 1998 that saddled the FAA with excessive costs, archaic work rules and restrictions on our ability to modernise the system.
In retrospect, the prior administration made a bad deal in 1998. The FAA bought something that the taxpayer cannot afford. The provisions we inherited of the contract tied the FAA’s hands. We gave away the rights to control schedules and to deploy technology. In good conscience, we cannot let that continue.
In 1998, the government promised the taxpayers that the NATCA agreement would cost only $200m additional over the first three years – all of which would be offset with ‘internal savings’ generated through greater efficiency and productivity.
For example, the contract was supposed to reduce the number of supervisors, in exchange for having controllers take on additional ‘supervisory’ duties. In reality, the promised efficiency and productivity gains – and the associated savings – never materialised.
But the FAA’s payroll more than doubled. In reality, the agreement did not result in greater efficiency and productivity. And as a result of the contract, air traffic controller pay increased dramatically. Our payroll expense for controllers went from $1.4bn to $2.4bn.
Between 1998 and 2004, controller pay increased a staggering 68% – which is well beyond private industry, other government agencies and the rest of FAA. In 1998, with an average compensation package of $95,400, controllers were among the highest paid civil servants
In fact, over the life of the contract, the gap between controller salaries and salaries for other FAA unionised employees increased 2.5 times. Adding up all the increases that the controllers’ union received over the first six years of the agreement, they cost the FAA $3.6bn.
The bottom line does not lie. Simple arithmetic dictates that the contract cost too much. Common sense will tell you that the taxpayer cannot afford to take another hit like that again. As far as generating savings on supervisory positions goes, currently, the average controller’s compensation package is $165,400 a year and more than 1300 controllers will have compensation packages exceeding $200,000 this year. That’s a lot of money by anyone’s standards.
While I have always said controllers should be paid well for a job well done, that does not mean the FAA should pay its controllers significantly more than commercial pilots or your local fire department or police department pays the brave men and women who not only are highly skilled professionals protecting the public – like our controllers – but also put their own lives on the line every day.
This is not just a discussion about paychecks. The current agreement contains all sorts of restrictions on the FAA that no employer would agree to in any sensible business arrangement – provisions that give the union de facto control over schedules and staffing levels. Provisions that slowed down the implementation of critical new technologies. Provisions that created a culture of haves and have nots, of civil servants working for the same agency. That’s just not right.
No one has said that labour negotiations would be easy. The FAA will take a respectful, reasonable and business-like approach. Our air traffic controllers who do a fine job for the public every day clearly deserve this. This is not about the job they do, this is about a contract that was excessive and must be changed. Our goal is to reach a voluntary, negotiated agreement with NATCA – and to have an agreement in place
quickly so that we can turn our mutual attention to system safety and modernisation.