Southwest Battles U.S. Fees

From Bloomberg News

Southwest Airlines Co. is contesting a U.S. government plan to charge the airline $24 million for passenger security checks, saying the effort is unfair and possibly illegal.

“We are going to challenge the arbitrary, capricious and arguably unlawful assessment of these taxes with every fiber of our being,” said Ron Ricks, a Southwest senior vice president. “We are bewildered and frustrated.”

Other airlines may also challenge the Transportation Security Administration as it seeks to collect $103.7 million in 2005 fees and raises the levies by more than a third this year. Delta Air Lines Inc. and Northwest Airlines Corp., which together owe $19.7 million from 2005, said the fees were based on “fundamentally flawed” methods.


The biggest U.S. carriers, after losing $40 billion since 2000, were lobbying Congress to relieve taxes they view as excessive even before word of the latest increase arrived. They paid about $16 billion in taxes and fees last year, according to the U.S. Air Transport Assn., a Washington trade group for big carriers.

Airlines in 2005 paid $324 million under the fee in question, the trade group estimates.

The fees have been collected annually since 2002. The levies are supposed to be based on the airlines’ actual screening costs in 2000, before the government took over responsibility for security.

“We are going to work with the Justice Department to ensure full payment where possible,” said Randall Fiertz, the security agency’s revenue director.

Carriers including Dallas-based Southwest, the largest U.S. low-fare airline, received collection notices for 2005 fees this month. Southwest has the highest amount due of all carriers.