Senators Agree On Airline Pension Relief Four U.S. airlines would get extra time to make pension payments otherwise due imminently under an agreement struck in the U.S. Senate.
American, Continental, Delta and Northwest airlines all would be able to spread their catch-up pension contributions over a 14-year period as part of "leniency" in a pending rewrite of the nation's pension laws. The Senate may approve the bill as early as this week when it returns from its fall recess.
"We've reached an agreement on the things that deal with airlines," Senate Finance Committee chairman Charles Grassley (R-Iowa) said. Without help, some of the airlines had said they'd have to turn their pension plans over to the
Pension Benefit Guarantee Corp., as United Airlines did when it declared bankruptcy. Northwest, which filed for bankruptcy in September, has said it is required to contribute $3.3 billion to its pension plan between 2006 and 2008. Delta owes $3.6 billion during the same time. Sen. Mike DeWine (R-Ohio), who
objects to provisions unrelated to the carriers, is holding up the legislation. PBGC, which insures corporate pension plans, is more than $23 billion in deficit, in part because of United's bankruptcy. Even if the Senate approves the legislation, the leniency provision for airlines faces staunch opposition in the U.S. House, where the broader pension bill passed the Committee on Education and the Workforce on June 30. That committee's chairman, Rep. John Boehner (R-Ohio), has called the Senate's airline provision "irresponsible." Still, the Senate provision already is giving airlines hope. Continental last week said the relief may allow it to preserve a hub in Cleveland.
TSA Allowed
To Charge For Background ChecksThe U.S.Congress this month granted the Transportation Security Administration the authority to charge fees for conducting security background checks, opening the
door to a fee-based trusted traveler program. The legislation also paved the way for the transfer of more airport security screening to private contractors by providing legal protections to airports that ditch government screeners.Both measures are part of a $31 billion appropriations bill funding the Department of Homeland Security in the fiscal year that began Oct. 1. The legislation boosts funding for aviation security by about $300 million, with nearly $6 billion to fund TSA and $686 million for the air marshal program. TSA's authority to charge a background-check fee positions it to create a broad
registered traveler program along the lines of the private, airport-run initiative underway in Orlando. TSA on Sept. 30 ended a 14-month test project at six airports in which frequent travelers were invited to submit to a criminal background check and provide biometric information in exchange for the
right to bypass extra layers of security screening
(BTN, Oct. 3). The privately run Orlando program, which will operate until at least January, has been praised because it was open to passengers on all airlines serving the airport, not just one as in the TSA-run pilot. In Orlando, would-be trusted travelers
pay $80 for the privilege; until this month, TSA didn't have the authority to charge fees. With the new authority, the agency may be able to establish a competitive model run by the federal government, said Thomas Blank, a former TSA deputy administrator. The Homeland Security funding measure may also
facilitate the transfer back to private contractors security-screening responsibilities at airports. Rep. Harold Rogers (R-Ky.), the chairman of the Homeland Security appropriations subcommittee, said privately administered screening programs at airports "would have a lot more flexibility and maneuverability" to respond to peak travel times than TSA and added some airports have hesitated to make the switch for fear of being sued if terrorists carry out an attack. Rep. Peter DeFazio (D-Ore.), the top Democrat on the panel, said he thinks reverting to private screening companies will hurt airport security.
FAA Begins Funding O'Hare ExpansionChicago's O'Hare International Airport won approval from the
Federal Aviation Administration to begin a $7.5 billion expansion, only to have its plans halted by a court order hours after construction began. The U.S. Appeals Court in Washington, D.C., issued a stay after suburban foes of the project raised concerns about the project's financing and the demolition of a
150-year-old cemetery. The project is being funded in part by an initial FAA $300 million grant. When complete, the renovated terminals and runways will cut delays by allowing 25 percent more takeoffs and landings, officials said. The expansion "will save travelers time, make our skies safer and reduce delays
across the entire aviation network," Transportation Secretary Norman Mineta
said.