WASHINGTON (AP) -- Sen. George Voinovich landed recently at Cleveland Hopkins International Airport and was diverted without warning to a room filled with more than 50 cheering Continental Airlines employees.
''They said they just wanted to thank me for trying to straighten out the mess with the pension bill,'' Voinovich said.
Continental, struggling financially but feeding its employee pension fund better than most airlines, says a compromise forged by Voinovich and fellow Ohio Republican Sen. Mike DeWine would avert an untenable situation at its 4,000-employee Cleveland hub.
While other airlines have terminated or frozen their retirement benefits accounts and left the federal Pension Benefit Guaranty Corp. holding the bag, Continental has kept paying into its main pension fund. The carrier announced Monday an $84 million contribution, bringing its 2005 total to a fully funded $304 million.
When a Senate committee DeWine sits on was about to send legislation to the floor last week to bail out bankrupt carriers with frozen pension funds, Houston-based Continental Airlines Inc. called on Voinovich and DeWine for help.
Minneapolis-based Northwest Airlines Corp. has a hub in Detroit and Atlanta-based Delta Air Lines Inc. has a hub in Cincinnati. Continental officials say the geographic proximity of the three hubs makes Cleveland vulnerable: It would lose important connecting-flight traffic to the larger Northwest and Delta hubs if those airlines were able to save on pension contributions and then lower their fares.
''Our Cleveland hub is relatively small and is therefore highly susceptible to competitive pressure from other hubs in the region, like Northwest's large Detroit hub,'' said Continental spokesman David Messing. ''That kind of competitive pressure could have become exceedingly threatening if the pension legislation had delivered unequal financial relief to one competitor over another.''
Continental accounts for 248 of the 320 average daily departures from Cleveland Hopkins.
Continental pilots agreed to freeze their pension plan and other employees took $500 million in pay cuts to keep the airline solvent. The company continued to make hundreds of millions of dollars in contributions each year to a second pension plan.
Since 2002, Continental has made $826 million in pension contributions. Meanwhile, Delta and Northwest recently declared bankruptcy with combined pension underfunding of $16.3 billion.
The recent plan terminations of UAL Corp.'s United Airlines and US Airways resulted in $9.6 billion in claims - the difference between liabilities and transferred assets - for the PBGC, the federal agency that insures private pension plans and takes over bankrupt plans.
Congress wanted to rush the pension bill to keep the PBGC solvent. A House version of the bill is sponsored by Rep. John Boehner, R-Ohio, chairman of the Education and the Workforce Committee, which approved it.
Voinovich and DeWine, chairman of the Retirement Security and Aging subcommittee, placed an initial hold on the Senate bill to stop targeted help for Delta and Northwest and negotiated an amendment to give all airlines extra time to catch up with their pension funding.
But in blocking quick passage of the bill, questions arose about other provisions that had nothing to do with airlines _ like one that forces companies with poor credit ratings to pay more to the PBGC, regardless of the health of their pension funds. DeWine defended manufacturers with fluctuating bond ratings.
An amendment that he co-sponsored requiring funding based on a three-year bond rating, instead of a single year's, rankled Republican leadership, which wants to shore up a $500 billion deficit in corporate pensions as soon as possible.
The office of Senate Majority Leader Bill Frist, R-Tenn., released a statement Friday indicating plans may be scrapped to return to the pension bill after this week's recess. DeWine urged Frist to bring the bill to the floor.
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