Negotiations between PATCO and the Federal Aviation Administration (FAA) began in February 1981. PATCO president Robert Poli demanded an across-the-board wage increase of $10,000/yr for controllers whose pay ranged from $20,462 to $49,229; the reduction of a five-day, 40-hour work week to a four-day, 32-hour work week; and full retirement after 20 years service -- a package with a $770 million price tag. The controllers argued that they deserved these considerations due to the highly stressful nature of their very important work. The federal government balked at these budget-busting demands of more money for less work, well aware that other federal employees were likely to take action to improve their lot if PATCO succeeded. The FAA made a $40 million counteroffer which included a shorter work week and a 10 percent pay hike for night shifts and those controllers who doubled as instructors. Further negotiations between Poli and Transportation Secretary Drew Lewis sweetened the pot even more. Nonetheless, 95 percent of PATCO's membership rejected the final settlement. The FAA began work on a contingency plan that would go into effect if a strike occurred.
Designed to take place during the busiest time of the year for airlines, the strike threatened major carriers like Braniff, Eastern, American and TWA, who reported losses of $30 million a day during the strike. These companies had been counting on a summer surge in business to offset losses due to fare and route deregulation which had spurred the growth of new, smaller carriers that effectively competed with the giants. Concern grew regarding the extent to which the strike would impact business and the economy. Air transportation was a $30 billion-a-year business; every day 14,000 commercial flights carried 800,000 passengers -- 60 percent of them on business trips -- while 10,000 tons of air cargo was transported daily. Airlines employed 340,000 people and revenue losses due to the strike forced some to resort to layoffs and management wage cuts. The fresh fruit, fresh flower and fresh fish markets depended on swift air transport, as did other industry in need of spare parts, health care services for blood supplies, and the financial system for paper fund transfers. But other businesses prospered thanks to the strike -- among them Trailways and Greyhound, the Amtrak rail service, and car rental agencies, as travelers sought alternate means of transportation.
To the chagrin of the PATCO strikers, and the surprise of nearly everyone else, the FAA's contingency plan functioned smoothly, minimizing the strike's effects. Approximately 3,000 supervisors joined 2,000 non-striking controllers and 900 military controllers in manning airport towers. The FAA ordered airlines at major airports to reduce scheduled flights by 50 percent during peak hours for safety reasons. Nearly 60 small airport towers were scheduled to be shut down indefinitely. The FAA's Oklahoma City training