Washington Wire: Senate Passes Pension Bill

Senate Passes Pension Bill
The U.S. Senate this month adopted a House-passed bill that overhauls the nation's private pension laws and includes more time for Northwest and Delta airlines to shore up their pension plans, leaving Continental and American airlines waiting for a "technical corrections" bill in September to provide them equal treatment. The 93-5 vote only came after leaders assured senators from American and Continental hub states that the corrections measure would be among the first considered when Congress returns to Washington after a month-long recess. The bill now goes to President George W. Bush for his signature. Lawmakers from states served by Continental and American had groused that the pension bill effectively gave bankrupt Northwest and Delta, which have frozen their active defined-benefit pension plans, 17 years to shore up their pension plans while requiring Continental and American, which have not yet frozen their plans, to do it in 10. The Senate earlier had backed a provision allowing all four airlines 20 years to pay unfunded pension liabilities. Senators were discouraged from trying to amend the pension bill on the floor because any amendment would have required differences to be reconciled in a conference committee with the House, which already has adjourned for the summer. Sen. Kay Bailey Hutchison (R-Texas) said she cast a vote in favor of the legislation only after receiving guarantees that the disparity perceived by Continental and American is fixed. "We will continue to try to equalize American and Continental with Northwest and Delta," she said. "We have everyone's word that we'll make an effort." The treatment of the airlines touched off a new round of public relations jockeying and lobbying. Continental spokesman Dave Messing said, "We share the Texas delegation's concern about the competitive aspects of pension reform and appreciate their efforts to prevent the government from picking winners and losers in the airline industry." Northwest Airlines spokesman Kurt Ebenhoch, however, said there was no favoritism for his company and Delta in the bill because American and Continental would receive the same pension treatment if they freeze their plans, something the financially healthier airlines have avoided. Northwest applauded the Senate's action. "With employees making the difficult decision and sacrifice to freeze their pension plans, all of us looked to Congress for the additional time required to save our plans," said Andrea Fischer Newman, senior vice president of government affairs.

Eclipse Jet Clears Major Hurdle
The Federal Aviation Administration has granted a new, smaller business jet made by Albuquerque-based Eclipse Aviation a "provisional type certificate," a key step to putting a new fleet in the air that could revolutionize travel between smaller airports. Acting Transportation Secretary Maria Cino on July 27 said that the Eclipse 500 aircraft requires less room to take off and land, allowing them to more easily access smaller airports. The Department of Transportation hopes a proliferation of the jets will reduce congestion and delays at major hub airports by making it easier to fly directly between small cities. "Thousands of new jets like this are going to redefine the way Americans travel, help cut airport congestion and drive economic growth in cities and towns across the country that today only dream of commercial air service," Cino said. Eclipse now may begin training pilots on the new jet as it awaits final certification. Only then can it begin filling nearly 2,500 orders that already have been placed for the jets. FAA administrator Marion Blakey said final certification is imminent. "Today's announcement is significant because it means we anticipate no further major hurdles in the process," she said. Eclipse said it is producing one of the quietest and most efficient jets in flight. Each aircraft costs about $1.5 million, compared with about $4.5 million to buy the next-lowest-cost jet, and costs $340 an hour to operate, compared with $675 for existing aircraft.