Southwest Leads The Charge
It's hard to be a
low-cost airline when the cost of doing business keeps going up.
That's especially true for the LCC pioneer, Southwest... which,
like other carriers, faces government efforts to almost double the
fees charged for security screening.
Southwest alone currently pays $26 million a year in screening
fees, and the TSA wants to almost double that annual payment to $50
million. It's all part of a system-wide adjustment the government
is pushing on the airlines.
The Street.com reports domestic carriers now pay $319 million a
year for security screening... and if the government has its way,
that cost would go up by about $104 million.
All told, airlines pay the government more than $3 billion a
year for security services -- at a time when domestic carriers are
losing a combined $40-billion over the past five years.
Southwest says the new security charge is "improper," was
"completely unexpected" and "made without notice or opportunity to
protest." The airline disclosed the change last week, when it
reported its 2004 Q4 earnings of $86 million.
One Southwest lawyer says the company will do everything it can
-- including suing the government, if necessary -- to fight the
proposed increase, which stems from government claims the airlines
haven't been paying their fair share.
Passengers already shoulder most of the burden in the current
security payment structure, with passengers paying up to $5 per
trip ($2.50 per flight segment) as part of security procedures
implemented following the 9/11 attacks. Since then, the government
has also required the airlines to pay the same charges they once
did for private security screeners, although the program was now
handled by the TSA.
"[Since 9/11] there has been consistent grousing from the TSA
about the numbers reported by the airlines," said Southwest
Legislative Counsel Tom Chapman. "The TSA has always maintained
that the airlines under reported, although there have never been
any specific examples. No one at TSA ever questioned our number,
and in fact, some high-ranking folk at TSA and the Department of
Transportation publicly praised Southwest for the thorough job we
had done and the number we reported."
As far as the other airlines, the other six biggest US airlines
say they haven't paid and haven't decided how they will
respond.
"We have not paid the TSA's retroactive fee increase," said
American Airlines spokesman Tim Wagner. "We are still exploring our
options in regards to the increase."
Other carriers issued similar statements. Additional new charges
include $14.9 million for Delta -- which that carrier, even more
than most, can ill-afford to spend.
TSA spokesman Chris White wouldn't comment specifically on
Southwest, but said the new charges are legitimate and resulted
from impartial analysis from the GAO.
"They came up with
their own independent numbers," said White. "We're trying to
collect past-due amounts. The fee is a vital piece of our nation's
security costs. The airlines have a cost to bear, the passengers
have a cost to bear and the American people have a cost to
bear."
The airline industry contends since 9/11, they have been singled
out to shoulder most of that burden.
"The method TSA used to calculate the amount it claims carriers
owe is inconsistent with Congressional intent," said Airline
Transport Association President James May. "We strongly oppose
TSA's action."