After receiving a “best and final” contract proposal more costly than what the air traffic controllers union indicated publicly, the U.S. Department of Transportation`s Federal Aviation Administration (FAA) ended contract negotiations with the National Air Traffic Controllers Association (NATCA).

The union rejected an agency proposal that preserved the current salaries and benefits for the existing workforce while still saving taxpayers nearly $1.9 billion over the next five years. The FAA’s final offer was over $200 million better than its previous formal offer, all of that directed to preserving the annual cash compensation of the existing workforce.

“Our proposal is both fair to our controllers and ensures that the funding, technology, and people will be in place to ensure safe and seamless travel for the flying public,” said FAA Administrator Marion C. Blakey.

The FAA will submit its final proposal to Congress which has 60 days to review the FAA’s proposal and NATCA’s objections. By statute, the FAA is authorized to implement its proposal if Congress does not act otherwise within the 60 days.

With the help of a federal mediator, both sides agreed on the vast majority of the provisions in the contract. Negotiations stalled on the issue of base pay and two types of premium pay that together have escalated the average controller’s salary and benefits to over $170,000 annually, a more than 75-percent increase from 1998-2006.

The FAA proposal does not cut the salaries of controllers already on the job. It “grandfathers” the annual salary (base pay and locality pay) for existing controllers and also provides for future locality increases and performance pay awards. The proposal also implements a new pay plan that aligns new controller salaries with the rest of the FAA’s professional workforce. The FAA proposal also gives the agency the flexibility to introduce new safety technology more quickly and to deploy controllers based on actual air traffic demand.

Significant costs savings are not only achieved through a new controller pay scale, but by eliminating two premium pays - Controller Incentive Pay, a second locality pay unique to some controllers, and Controller-in-Charge pay premium, which has not proven to reduce required supervision as originally intended.

The union’s pay proposal, while achieving limited cost savings in the first few years, would revert back to guaranteed increases and keeps pay scales close to their current levels for all controllers, essentially deferring expenses, nullifying any initial savings and retaining an excessive pay structure for the long term.

“The union wants us to mortgage the future of the national airspace system,” Blakey said. “Their proposal is a Trojan horse that will spring costs on the taxpayer at a critical juncture when we need to fund a safer, satellite-based system and hire a new generation of controllers and inspectors.”

Although the FAA and the union are at impasse, Blakey praised the professionalism of the controller workforce and assured that during the duration of the impasse the agency and its employees will continue to keep a strict focus on the FAA’s responsibility to operate the nation’s aviation system safely and efficiently.

“Our managers and controllers are dedicated professionals. The public can count on them to carry out their important public safety mission,” Blakey said.