TSA: Carriers owe us security fees
By Andrew Compart
tancy and came up with an estimate of $425 million to $471 million, with a “midpoint” estimate
of $448 million.
The GAO report’s conclusions became the basis
for TSA invoices to airlines in January 2006. But
the carriers objected to the process and methodology used to arrive at those numbers, and many
of them filed administrative appeals. All of those
Wyndham is opening its first London hotel.
the London Conrad
The Wyndham Hotel Group will
open its first U.K. property with
the conversion of Hilton’s five-star hotel, the Conrad of London.
Wyndham will convert the all-suite
hotel to the Wyndham London-Chelsea Harbour.
The company said the move was
part of a strategy to pursue flagship Wyndham properties in key
international and gateway cities.
In a dispute that has now entered its fifth year
but may have finally reached its breaking point,
the Transportation Security Administration is
demanding that airlines reimburse the federal
government $219 million for alleged security cost
underpayments — and airlines are looking to
challenge the bills in court.
More than half the total was billed to
Southwest, American and Delta, with other major carriers accounting for most of
the rest (see chart).
The payment dispute runs back to
When, in the aftermath of the 9/11 attacks, the law was changed to put the federal government in charge of security, it
also gave the TSA the authority to make
airlines help pay the government’s costs
of screening passengers and property by
contributing the same amount they had
spent on screening in 2000.
At the time that legislation was being passed,
the Air Transport Association and airline executives estimated that amount to be about $1 billion.
But in 2002, after a closer look, the airlines said
the $1 billion estimate was rough and unscientific and that the actual amount came to about
The airlines submitted documentation they
said showed they spent $319 million. But the TSA
believed the carriers had actually spent about
$750 million, and the two sides never were able
to reach an agreement on the amount of 2000
The issue reached such an impasse that Congress inserted language into the Department of
Homeland Security Appropriations Act of 2005
that required the Government Accountability Office to independently review the security costs incurred by airlines in 2000.
The GAO enlisted the help of independent contractor SH&E International Air Transport Consul-
*Billed separately, although it has merged with US Airways
$18M $15M $14M
$9M $12M $5M
Source: Transportation Security Administration
Another big ship
to Holland America
Holland America Line will add a
2,100-passenger ship to its roster
in fall 2010, a sister vessel to the
86,000-ton Eurodam, which is
slated to debut next summer.
Carnival Corp., HAL’s parent,
placed the newbuild order with
Italian shipyard Fincantieri, for an
all-in cost of about $567.6 million.
All 1,050 staterooms will have flat-panel TVs and DVD players, 85%
will offer ocean views, and 67%
will have private verandas.
HAL said the two ships, its largest, would represent a 23% increase in the line’s capacity.
site in Tortola
Raffles Hotels & Resorts will debut
its second property in the Carib-
bean in 2010 with the opening of
the 100-room Raffles Tortola in the
British Virgin Islands. The 50-acre
site, on the northeastern side of
the island, will include 250 Raffles
ARC reports sales
up 1.1% in May
Travel agencies remitted $7.8 billion through ARC in May, up 1.1%
from May 2006. ARC stats, which
now reflect transactions for the
calendar month rather than four
to five processing weeks, show
agency sales averaged $12,199 per
Domestic airline ticket sales, excluding taxes, totaled $3.5 billion,
down 4.5% from last May, while
international ticket sales rose 6.5%
to $3.2 billion. E-tickets accounted
for 95.3% of ticket sales, up 2.3%
from a year ago.
appeals have now failed, and this month the TSA
told airlines they have to pay up.
The battle, however, doesn’t appear to be over.
“We are disappointed, but not surprised, that
TSA has rejected the administrative challenges by
a number of ATA member airlines to the unlawful
additional [Aviation Security Fee Infrastructure]
assessments that TSA imposed in January 2006,”
the ATA said in response to the new invoices from
the TSA. “Our members intend to challenge TSA’s
action, and we will pursue all appropriate options,
including review by the courts, to overturn these
legally and procedurally flawed assessments.”
One possible complication to that challenge is
a gray area in the law as to whether a legal challenge of the assessments is allowed. The law as
currently written prohibits judicial review of the
assessments, but airlines and the ATA may be able
to get around that by charging the process and
methodology for determining the amount of the
assessments, rather than challenging the assessments themselves.
Delta to interline
with Brazil’s Gol
Delta signed an interline agreement with Brazilian low-cost carrier Gol to enable faster and more
convenient connections between
the airlines. Effective July 1, the
carriers will offer interline trips
on a single ticket, with through-checked baggage, for passengers
connecting in Sao Paulo or Rio de
Gol, which has been a big success in South America, serves 58
destinations in Brazil plus several
major South America points, including Buenos Aires and Lima,
Azamara delays Quest’s inaugural sailing
By Johanna Jainchill
Portugal gets first
InterContinental Hotels and Resorts plans to open its first Portuguese property in 2009, in the
northern city of Porto.
The InterContinental Porto Palacio Das Cardosas will be set in a
250-year-old building in the city’s
main square. The property will feature 109 rooms and a spa.
Azamara Cruises can’t be accused of not learning
from its mistakes: The fledgling cruise line delayed
the first sailing on its second ship, the Azamara
Quest, slated to debut in October, to allow the
ship an additional five days in drydock.
Azamara, the deluxe cruise line operated by
Celebrity Cruises, may be trying to avert a repeat
of what happened with its first ship, the Azamara
The line’s inaugural voyage was delayed by one
day due to not having completed the $19 million
drydock improvements by the time guests arrived
in Bayonne, N.J., on May 5 to board a cruise to
That delay was costly: Azamara fully refunded
all cruise fares and paid for all guests’ local lodging
or transportation home that night.
Passengers booked on the Quest’s 12-day inaugural sailing on Oct. 19 were informed via a letter
sent out on June 5 that their cruise was canceled.
The Quest won’t be ready until Oct. 24, Azamara
said, and will sail a two-day, roundtrip cruise from
Miami to the Bahamas that day, followed by a five-day Caribbean cruise from Miami on Oct. 26.
“We know from experience that with most ship
launches and major revitalizations, a surprisingly
significant amount of finishing details occur during the last few days,” Azamara Cruises President
Dan Hanrahan said. “[The Journey], however, was
a ship we were less familiar with, and the drydock
and refurbishment didn’t proceed as rapidly as we
Azamara is offering Quest passengers the option for a full refund of the Oct. 19 cruise or a
transfer to a 12- or 14-night Caribbean, 14- night
Panama Canal or 12-night South America cruise
on the Journey or the Quest between October and
December of this year, excluding the Christmas
and New Year’s sailings. Passengers who transfer
will also get up to $600 in onboard credit.
debuts a Contessa
Majestic America Line’s second
Alaska vessel, the 48-passenger,
went into service in Ketchikan on
June 10. The Contessa will sail 16
seven-night Inside Passage cruises alternately north from Ketchikan and south from Sitka.
The line acquired the 25-year-
old vessel, formerly the Executive
Explorer, from Glacier Bay Cruise
Line last year. The launch date
was pushed back from May 13 as
the company completed an extensive renovation.