The divisive issue of a non profit, independently run air traffic control has been grounded for the time being.
House Republicans have opted instead for a stop gap measure to allow continued funding for the Federal Aviation Administration beyond the looming March 31 expiry deadline.
Taking air traffic control away from FAA oversight has been broadly backed by US airlines except for Delta.
However non commercial aviation and business groups fear it would give major airlines too much influence in how a new ATC system would be run.
The proposal by House Transportation Committee Chairman Bill Schuster would have given airlines four out of the 11 seats on the board of the new entity.
Schuster insisted the bill is still very much alive.
"This is an ongoing process, and we will continue working to educate members and address questions they have about the bill," he said in a statement.
"The need for an extension was not a surprise, and details about the short-term measure are still being discussed," he said.
However National Business Aviation Association President Ed Bolen said it would set a dangerous precedent.
"The public airspace belongs to the public and it should be run for the benefit of the public. This is a sweeping transfer of authority. It’s breathtaking in its magnitude and it’s potentially deadly in its consequences," Bolen said.
