Twenty-five years ago, Congress passed a law requiring passengers departing from U.S. airports to pay a security fee to the Transportation Security Administration (“TSA”) to offset new security measures (the “Security Fee”). The legislation made air carriers responsible for collecting the Security Fee from passengers and remitting it to the TSA.1 The following year, the TSA issued guidance explaining that when a passenger does not travel on a scheduled flight and the ticket no longer has value toward future travel, the Security Fee would be subject to a refund by the air carrier to the passenger; if the air carrier had already remitted the Security Fee to the TSA before providing a refund to the passenger, the air carrier could offset the amount of the Security Fee by deducting it from a future Security Fee remittance.2 However, if the air carrier failed to refund the Security Fee to the passenger for any reason, it would not be entitled to such a deduction and would still be responsible for remitting the Security Fee to the TSA.3 Thus, according to TSA guidance, the air carrier had no right to the Security Fee—it belonged to either the passenger or the TSA.
The United States Court of Appeals for the Eleventh Circuit recently considered the legislation and the TSA’s accompanying guidance in the context of expired travel “credits” retained by an air carrier when customers cancel their flights.4 In that case, the air carrier’s ticket cancellation policy required passengers to pay a cancellation fee of the lesser of $100 or the total amount paid for the ticket, inclusive of taxes and fees.5 If the ticket retained any value thereafter, the customer would receive a credit that expired in 60 days, in which case the air carrier recognized the full amount of the unused credit as revenue, including the portion attributable to the Security Fee. If the air carrier had already remitted the Security Fee to the TSA at the time the credit expired, it then deducted that amount from future Security Fees paid to the TSA.
The air carrier was audited by U.S. Customs and Border Protection (“CBP”), which determined that it had “under-remitted” Security Fees by retaining the amount of credits attributable to the Security Fee. CBP reasoned that the air carrier should have remitted the Security Fees to the TSA or refunded them to the passenger, and determined that the air carrier could not count an expired credit as a refund. The TSA adopted the audit’s findings, and later upheld its liability determination upon administrative review.6
The Eleventh Circuit Court of Appeals sided with the TSA. First, the court explained that even though the law requires only traveling passengers to pay a Security Fee, the law also requires air carriers to remit any Security Fee that they “collect.”7 Therefore, if an air carrier elects to collect the Security Fee earlier than the time the ticket purchaser becomes a passenger—for example, at the time it sells the ticket—then the amount the air carrier collected becomes payable to the TSA, even if the purchaser ultimately does not travel.8
Second, the court rejected the air carrier’s argument that it satisfied its remit-or-refund obligations because courts have construed a merchant’s credit to be a refund. The Eleventh Circuit held that an expired credit does not constitute a refund under the TSA’s 2002 guidance, which expressly contemplated expired credits and required issuance of a refund even after a credit has expired.9
Finally, the court held that the air carrier had fair notice of its obligation to remit the Security Fee.
This recent decision makes clear that air carriers must remit any Security Fees they “collect,” even when customers cancel their flights and do not timely use their carrier-issued credits.
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1 See Aviation and Transportation Security Act, 49 U.S.C. §§ 44940(a)(1), 44940(e)(2) (2001).
2 TSA-2001-11120-0059.
3 Id.
4 Spirit Airlines, LLC v. Transp. Sec. Admin., No. 25-10461, 2026 WL 982645, at *1 (11th Cir. Apr. 13, 2026). The decision will have a formal citation once it is published in the Federal Reporter.
5 Id. at *2.
6 Id.
7 Id. at *3 (citing 49 U.S.C. §§ 44940(a)(1), 44940(e)(1)).
8 Id.
9 Id. at *4.