By Brent Kendall Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)- A divided federal appeals court on Friday rejected the airline industry's challenge to the Transportation Security Administration's calculation of fees it charges air carriers for passenger and baggage screening. The TSA took over security at the nation's airports after the Sept. 11, 2001, terrorist attacks and Congress authorized the agency to impose fees to fund its security services. A group of 20 airlines, however, argued that the TSA's method for determining the fees was incorrect and exceeded the agency's administrative authority. The U.S. Court of Appeals for the District of Columbia Circuit disagreed in a 2-1 ruling. The court's majority deferred to the agency's calculations, which it said were reasonable. The case was appearing before the appeals court for a second time. In 2009, the court concluded that the TSA initially erred when it calculated the overall limit on the fees it could charge. The airlines argued that the TSA recalculations after the first ruling dramatically under-calculated fee refunds the government owed to the airlines. The airlines said they were shortchanged by potentially hundreds of millions of dollars. Airlines involved in the appeal included Southwest Airlines, American Airlines, Delta Air Lines, United Air Lines and US Airways. The case is Southwest Airlines v. TSA, 10-1227. -By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com
