BusinessCourt rules in favor of American Airlines in $30 million dispute with TSA
On Tuesday a U.S. Court of Appeals ruled against DHS ordering the agency to review its decision to deny reimbursing American Airlines $30 million for the additional security procedures it had been asked to put in place by the Transportation Security Administration (TSA) following the 9/11 attacks
DHS must reimburse $30 million // Source: fulltravel.it
On Tuesday a U.S. Court of Appeals ruled against DHS ordering the agency to review its decision to deny reimbursing American Airlines $30 million for the additional security procedures it had been asked to put in place by the Transportation Security Administration (TSA) following the 9/11 attacks.
According to the airline, in 2002, TSA requested that American Airlines install an enhanced automated baggage screening system at John F. Kennedy airport in New York and promised the airline that it would be reimbursed.
In addition, the airline said TSA had urged it to take a more expensive design approach for the new terminal than it was originally planning on building. American Airlines had initially opted to use a system to screen bags in the airport lobby at standalone stations, but TSA advised the company to create a system which scanned bags for explosives while on a baggage conveyor even though it would require significant architectural changes to the configuration of the building itself.
When American Airlines requested a reimbursement in 2004, TSA refused stating it had limited funds and had to prioritize security risks.
In the latest court ruling, the U.S. Appeals Court in Washington D.C. ordered TSA to reconsider its decision on the grounds that it had “arbitrarily and capriciously” denied the airline’s request “without providing a sufficient rationale on the record for doing so,” wrote Judge David Sentelle in his opinion.
The year that American Airlines had requested its $30 million reimbursement, Congress passed a law that instructed TSA to create a cost-sharing plan between the government and airlines to help pay for additional security measures.
John Pistole, the head of TSA, in a letter written in 2010, explained to American Airlines that “reimbursement for previous work outside a formal agreement comes at the cost of advancing current or future security measures,” which is why its claim was rejected.
In response to last week’s ruling, American Airline said it welcomed the decision and looked forward to working with TSA officials to resolve the matter.
“Today’s court decision affirms that the federal statutory mandate requiring payment was not followed in this matter,” Tim Smith, an American spokesman, said in an e-mailed statement. “Given the court’s decision, American looks forward to meeting with the TSA to discuss this further.”
