Uneven Treatment For Airline Pilots
Texas politicians say a pension reform bill passed by the Senate and House last week puts two Texas-based airlines at a competitive disadvantage. The bill, in general, allows companies with under-funded pension plans seven years to get caught up with their payments. However, companies that have frozen their pension plans get an additional 10 years to bring them up-to-date and they can do so at preferential interest rates. Bankrupt Northwest and Delta Air Lines qualify for the extension. Texas-based American and Continental do not and that's got the Texas delegation in both houses reaching for their legislative guns as disparity spreads. The airline kafuffle could also spread to places like New Jersey and Ohio where American and Continental have big hubs and where politicians will undoubtedly do what they can to preserve the jobs created therein. The result could be a series of amendments to the bill that would stall its passage and maybe kill it during the conference stage. A White House spokesman told The Wall Street Journal that President Bush didn't like playing favorites on the issue but that the threat of Northwest and Delta dumping about $10 billion of pension liability on the government-owned Pension Benefit Guaranty Corp. was too great to ignore and he'll sign the bill if it's passed.