February 6, 2006

US proposes hike in air passenger security fee

WASHINGTON (Reuters) - The Bush administration proposed on
Monday to boost security fees on commercial airline flights to
raise an additional $1.3 billion in receipts from passengers.

In its fiscal year 2007 budget proposal, the homeland
security agency sought to hike the one-way passenger fee from
$2.50 to $5 for all flights. Budget planners expect the
increase will boost funding from passenger security fees to
$3.3 billion, up $1.3 billion.

U.S. airlines -- especially bigger carriers that are
struggling financially -- have opposed increases in fees
because the companies say it undercuts their pricing power in a
fiercely competitive fare market.

Congress rejected an attempt last year by homeland security
officials to increase the fee, which covers most of the cost
for airport passenger and bomb screening. The government took
over airport security after the September 11, 2001 hijack

Budget planners expect to collect $644 million in other
security fees from airlines, including nearly $200 million in
retroactive payments.

Airlines have also fought attempts to collect more directly
from them, saying the government -- not industry -- needs to
pay airport security costs because it is a national security