Air Controllers Strike Again?

Twenty five years ago Ronald Reagan changed labor relations in America by firing the air traffic controllers for striking illegally over pay, violating their oath as federal employees. George W. Bush and the Republicans in Congress will soon face an equally aggressive union and the question is will they be equal to the challenge?

It will be more difficult for President Bush. In 1995, Bill Clinton proposed reform of the Federal Aviation Administration and a Republican Congress incredibly approved a broad bill that allowed the FAA to create a new labor system. In 1996, Clinton adopted a plan that allowed the National Air Traffic Controllers Association to bargain with FAA on all personnel matters. Although special pay rates and informal negotiating over compensation had existed and even led to the Reagan impasse, this was the first time for actual pay bargaining. In 1998, that union-dependent administration caved in to today’s average controller pay of $166,000 (not counting the most generous pension and benefits in the world), with the top rate of $197,000 exceeding the pay of all cabinet secretaries--and costing $1.9 billion.

That apparently is not enough. NATCA now demands $2.6 billion additional salary and a shorter work day too. Considering the high benefits and with tight budgets, FAA proposed a freeze on pay, since labor represents three-fourths of its costs, and demanded union concessions on the inflexible labor rules that create red tape and frustrate air-control efficiency. Negotiations are scheduled to continue through the first full week of March 2006. But NATCA is getting nervous. In a concession to sanity in the case of an impasse, the 1996 FAA rules allow management to submit a last offer to the union after the negotiation period that if refused would be sent to Congress. If Congress did not act in 60 days, FAA could impose its final offer.

NATCA has run to its allies on the Hill and Sen. Barack Obama has submitted legislation substituting binding arbitration in the event Congress does not act. Given that the union collects $20 million annually from its members (up, as the result of the generous pay, from a measly $8 million in 1998), it has the resources to get itself on the legislative agenda, including the services of the lobbying firm of the former Republican National Committee chairman, Ed Gillespie. Acting in 60 days, much less passing new legislation, will be difficult, however, and the real issue is whether the Bush FAA has the courage to submit its last offer and call the union’s bluff. The pressure on Administrator Marion Blakey to delay will be enormous.

Is there a better way than this messy and irrational political game of one-upmanship? In 1996, the Clinton Administration originally proposed a full divesting of the Air Traffic Control function to a new government corporation modeled after Amtrak and the Postal Service, appointed by the president and confirmed by the Senate. While airline, airport and even NATCA supported the proposal, general aviation interests (business and recreational pilots and owners) opposed since they pay only 3 percent of revenue but use 59 percent of control tower and approach services and so feared they would have to pay more. Republicans, not exactly inspired by the Amtrak analogy, went one better and asked for full privatization. These more fundamental reforms blocked each other, resulting in the current compromise system preferred by almost no one.

Sixteen countries have moved ATC services to independent or private control in the past decade, most appropriately retaining the safety function within the government. Most of these reformed systems now depend on user fees to rationalize costs and charges, although retaining lower payments for private aircraft but now based on market criteria. In New Zealand, operating costs for their then newly independent ATC system went down from NZ$120 million to NZ$80 million after the change. User charges went down 30 percent in real, inflation adjusted terms, 50 percent lower than the government anticipated, while safety standards were maintained. Fees in Australia declined 15 percent after privatization. Neighboring Canada, whose system interacts with the U.S.’s, has gone pretty much toward full privatization without any detectable negative effects.

The present labor crisis actually offers the Bush Administration an opportunity. It must not only submit its final offer in March but it should propose a privatization based on neighboring Canada’s at the same time. President Reagan’s decisive action proved an enormous stimulus to his policy agenda and, if he is bold enough, President Bush just might be able to reignite the flame for his administration too

Donald Devine, Editor.

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