Airlines oppose administration's plan to hike airline security fee
For three years now the administration has tried and failed to raise the airport security fee; the airlines object as ferociously as ever, but this time the administration may succeed
The Bush administration wants to double airline-security fees for most travelers starting in October 2006. The fee would increase to $5 a flight for non-stop travelers from the current $2.50. The change would cost airlines about $746 million a year for domestic flights, said airline consultant Aaron Taylor. Low-cost carriers such as Southwest Airlines, which rely more on non-stop flights than network airlines, would be hardest hit, he said. The fee was imposed after the 9/11 attacks, and Congress in the current fiscal year expects fees to raise $2 billion, or 43 percent, of the Transportation Security Administration’s (TSA) $4.6 billion aviation security budget. General tax revenues finance the remaining $2.6 billion.
The airline industry vigorously opposes the hike, arguing that their product is already taxed too much, even more than cigarettes, with about 26 percent of a $200 airline ticket going to taxes and fees. The largest U.S. carriers have lost about $40 billion since the start of 2000. United, Delta Air Lines, and Northwest Airlines, three of the four largest U.S. carriers, are operating under bankruptcy protection. Airlines last year paid the government about $1.9 billion under the $2.50 fee, according to the Air Transport Association trade group. The carriers also paid $324 million under a separate security fee tied to their airport screening costs in 2000, the group estimated.
The administration has failed for three years now to have the security fee raised. The carriers have until tomorrow to contest that higher fee.
-read more in John Hughes’s Bloomberg report
