When Randy Babbitt took over as the administrator of the Federal Aviation Administration, he had his marching orders. Reach an agreement with the National Air Traffic Controllers Association ASAP. The former Air Line Pilots Association president can now tick that one off his to-do list having concluded what the agency called “a challenging mediation process that has produced a landmark labor agreement.”

The increasingly strained relationship between FAA and NATCA, which represents 15,000 controllers, drew heavy criticism from Congress tired of having to address the issue as the Bush Administration ignored the festering problem. The clincher resulted from a decision Wednesday by an independent arbitration team on a handful of issues not resolved by the mediation, which settled more than 100 of the issues in dispute.

The three-year agreement ends a six-year battle. Controllers were working under a contract imposed by then FAA Administrator Marion Blakey and Congress in 2006 which froze pay, imposed new work rules and reduced new hirer pay by 30%. That contract was imposed after it FAA and NATCA reached an impasse in negotiating a new contract after the 2005 expiration of the extension of its last contract which expired in 2003.

Neither party released the details of the agreement but sources indicate restore pay incentives for controllers and increase new hirer starting salary from $20,000 annually, a sum that is highly ironic in the face of growing controversy surrounding new-hirer pilot pay at regional airlines that has received so much publicity since the crash of Colgan Flight 3407 in February. Such pay scales have raised the ire of Congress and the public who have criticized regionals  for their low, new-hirer pay – about $20,000 – for such highly trained safety professionals as pilots.

This is the first major government labor deal for the Obama Administration which pledged a quick resolution of the controller issues during the campaign. The proposed agreement was hailed as a “milestone on the final road to settlement,” by the agency. It awaits ratification by union members which should come within 45 days. The five issues decided by arbitrators, including compensation, are not subject to ratification by members.

FAA said the Obama administration recognized that not having a mutually agreed upon contract for the air traffic controllers had created an untenable situation and that ensuring the safety and efficiency of the nation’s aviation system made fair resolution a must.

The agreement provides employees with greater flexibility in their work schedules, childcare support, a new grievance review process, and a variety of other gains. At the same time, it affords FAA the flexibility to more effectively redeploy labor to congested airports using Controller Incentive Pay. The agreement also restores a more equitable pay standard, to benefit new hires as well as veterans nearing retirement. The associated costs will be phased in over the three years of the contract, which helps ensure that FAA will not have to tap into its budget for critical capital investments in order to handle increased personnel costs.

“This marks a new day between the FAA and the air traffic controllers as we move forward with a spirit of cooperation,” said FAA Administrator Randy Babbitt. “We are hopeful that once the review and ratification are complete, we can accelerate our efforts to adopt NextGen, the next generation air transportation system.”

"This tentative agreement marks a turning point in the relationship between the FAA and its air traffic controller and traffic management employees,” said Patrick Forrey, president of NATCA. “We wholeheartedly thank President Obama and Secretary LaHood for addressing the tumultuous labor relations issues at the FAA by establishing a fair process that has allowed the parties to negotiate and arrive at a collective bargaining agreement that NATCA members now have an opportunity to ratify. We look forward to working with the FAA and the aviation industry and community in a collaborative process to develop and implement the much-needed next generation aviation system."

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