U.S. Carriers Get TSA Reimbursement

The Transportation Security Administration by the end of today will have electronically distributed $2.3 billion to 66 U.S. carriers to reimburse security-related expenses. The payments are proportional to the total amount carriers have paid in security fees to TSA since February 2002. Payments range from $390 million for Delta to less than $5,000 for the smallest airlines. American Airlines' share is $361 million and United Airlines' is $300 million.

The cash injection, welcomed by an industry that lost another several billion dollars in the first quarter, is part of an airline relief package contained in the Emergency Wartime Supplemental Appropriations Act, finalized last month. The legislation also calls for another $100 million to compensate carriers for cockpit door reinforcement and suspends from June 1 through Sept. 30 the security fees that were imposed on airline tickets last February.

Most travelers, however, will not see any savings from the suspended fees, which had amounted to $2.50 per segment up to a maximum of a $10 per roundtrip. By no means a coincidence, airlines on June 1 plan to implement a price hike pushing roundtrip domestic fares up $10.

Once in effect, the fare hike will be the industry's first successful price increase in months. AA made the initial move and was followed promptly by other major competitors. Northwest Airlines, the traditional spoiler, also followed suit, essentially guaranteeing the hike would stick.

Several others fell in line after Northwest's match. Twelve carriers now are onboard, including eight of nine major carriers and low-fare competitors AirTran, ATA Airlines and Frontier. JetBlue and Southwest did not raise fares. "We wanted to share the tax holiday with our customers," said a Southwest spokesperson.