February 08, 2006

The fiscal year 2007 federal budget submitted by the Bush administration on Monday boosts the security fees paid by passengers on commercial airline flights from $2.50 to $5 for all flights. The hike would increase security funding from such fees to $3.3 billion, a $1.3 billion jump. The new fee will have opposition: Congress rejected a similar increase last year, and the airline industry has fought such measures in the past.

Last week, UAL Corp., parent of United Airlines, emerged from Chapter 11 bankruptcy protection. "We have achieved a great deal in our restructuring to reposition this company and build upon our assets," said Glenn Tildon, United's chairman, CEO and president. "We are in a very competitive industry, and we take nothing for granted." During its three-year stint in bankruptcy, United reduced its annual costs by about $7 billion, much of it in labor concessions and reductions in workforce. The carrier also eliminated unprofitable services and changed some operations and aircraft.

U.S. Bankruptcy Court Judge Robert Faris recently accepted a motion by Aloha Airlines to modify its reorganization plan. The airline, now expected to leave bankruptcy protection in mid-February, filed for protection from its creditors in December 2004.