US proposes hike in air passenger security fee
Posted on: Monday, 6 February 2006, 13:37 CST
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 attacks.
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 initiative.
Source: REUTERS
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