Aviation bill stalls on airline pension fight

By John Crawley

WASHINGTON (Reuters) - Fierce wrangling on Wednesday over a proposal to make airlines contribute more to their pension plans derailed U.S. Senate consideration of sweeping aviation legislation.

Sen. Jay Rockefeller, a West Virginia Democrat and chairman of the aviation subcommittee, said it was unclear when the chamber could move forward with the landmark bill to authorize Federal Aviation Administration (FAA) programs.

"We have to work this through," Rockefeller said. "Everybody can't be a winner."

The overdue bill proposes a multi-year blueprint for modernizing the aging U.S. air traffic control system as well as steps to address pressing concerns about commercial aviation -- maintenance practices, FAA safety oversight, delays and congestion, and service complaints.

"It is a bipartisan bill that has enormous consequences to the economy," said Rockefeller, who is trying to shepherd the measure through the Senate and into negotiations with the House of Representatives on a final package.

The House approved a similar bill last year. The White House objects to several proposals in the Democratic-controlled Congress and has threatened a veto.

Wednesday was the first full day of Senate debate, which immediately stalled on a provision to toughen funding requirements for airline pensions.

Powerful legislative allies of American Airlines, a unit of AMR Corp, and Continental Airlines Inc, said the change would restrict cash reserves at a time when struggling airlines need spending flexibility.