Independent Firm Validates High Cost of Controller Compensation - Cost of Protracted Contract Negotiations Approaches $2 Million

The FAA has announced that an international financial and accounting services firm validated the agency’s calculation that the average 2005 air traffic controller compensation package exceeded $166,000. Other independently validated figures included controller compensation increasing 75 percent between 1998 and 2005 and the doubling of the wage gap between controllers and all other FAA employees during the same period.

FAA Administrator Marion C. Blakey ordered the agency’s figures to be independently validated to counter claims by the air traffic controllers union that the agency’s controller compensation figures are inflated. In a few instances, the outside review found that the FAA actually underestimated the cost of controllers’ compensation. The review of the FAA’s calculations determined that average 2005 controller compensation was not $165,935 but rather $166,289.

Blakey also detailed the financial toll of the ongoing negotiations to the agency. As negotiations approach the six-month mark, costs associated with negotiations have risen to nearly $1.7 million. Negotiations have been conducted at neutral sites both in the Washington, DC metro area and cities throughout the U.S.

“We want to remove any doubt about how costly the current contract has been to the taxpayer,” said Blakey.

“At a time when our aviation system requires greater investment to improve safety and efficiency, we cannot afford to argue about the obvious—the controllers’ union got a lucrative deal in 1998. We want to focus our efforts on reaching a voluntary agreement that is fair to both controllers and the taxpayer.”

An independent firm that reviewed the FAA’s calculations found that the cost data used by the agency to calculate the average cost per controller reconciled to the agency’s accounting system which supports the FAA’s audited financial statements. Last year, the FAA received its fourth consecutive clean audit from the Department of Transportation’s Inspector General and KPMG on its financial reporting.

The independent validation and the rising cost of negotiations come at an important time as the FAA and the controllers union remain far apart on the issues of compensation and work rules that have generated premium pay during the life of the current contract.

The FAA’s contract proposal maintains the base-pay of current controllers, who are among the highest paid federal workers. Additional automatic pay increases will not continue, but current controllers will still be eligible for annual, merit-based pay increases. The agency’s proposal also provides managers with greater flexibility to staff, schedule and operate air traffic facilities in order to ensure staff levels are adjusted to meet daily, seasonal and long-term changes in air traffic, Blakey added. The FAA is also proposing to bring in new hires at a more realistic pay scale, one that narrows the pay gap between controllers and the rest of the FAA’s safety focused employees and is pegged to the civil service pay scale.

“Our air traffic controllers are and will continue to be highly competent, highly compensated professionals,” said Blakey.

“But the hard facts are that the taxpayers and travelers cannot afford the union’s current proposal.”

The union is proposing to raise the average total compensation of all controllers above $200,000 in the next five years and add $2.6 billion to the FAA’s payroll over the life of the contract, Blakey said. The union’s proposal also would limit the agency’s ability to fund hiring of a new generation of air traffic controllers over the next decade, Blakey warned.

The union is calling to maintain the current contract that is laden with premium pay as well as a shorter workday of 7 hours, which includes a 30 minute paid lunch break. This 12 percent decrease in productivity comes when controller time-on-position, the actual time spent controlling aircraft, at the FAA’s largest facilities already averages less than 4.5 hours per day.

The FAA began contract negotiations with the union on July 13. The existing contract expired on September 30, but has an evergreen clause that allows the original contract to remain in place so long as talks continue.

FMI: www.faa.gov, www.natca.org