Southwest, 19 Other Airlines Lose Bid to Lower Fees for Security Screening

Southwest Airlines Co. (LUV) lost a court challenge claiming that airlines are being overcharged by the U.S. Transportation Security Administration for screening passengers since the Sept. 11, 2001, terrorist attacks.

The U.S. appeals court in Washington today ruled that the fees, put in place after the attacks, were reasonable. The airlines’ portion of the fees are capped at what they paid in 2000 for airport screening before that duty was taken over by the U.S. government.

Southwest and 19 other airlines said the government’s determination that $420 million was spent in 2000 to screen passengers and property is too high. They argued their own study concluded the amount was $305 million.

The appeals court, which had earlier sent the case back to the lower court for additional investigation into the 2000 costs, said the “TSA adequately considered the submissions of dueling experts” this time around.

“In reality, there was no authoritative source for the number of airport screenings during the year 2000 -- no government audit of all U.S. airports, no contemporaneous and independently verified calculation,” the court said in the 2-1 decision. “Determining the figure in response to this court’s remand thus involved a good deal of inquiry and ultimately required a dash of art as well as science.”

Brandy King, a spokeswoman for Southwest, said her company is reviewing the decision and considering its options.

The case is Southwest Airlines Co. v. Transportation Security Administration, 10-1227, U.S. Court of Appeals for the District of Columbia Circuit (Washington).

To contact the reporters on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net;

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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