Frontier argued that the Aviation and Transportation Security Act only authorized the TSA to collect fees from actual travelers, not passengers who never boarded a plane. The airline contended that because it issued credit shells to cancelled customers, it had effectively refunded the fees and was not required to remit them to the government.
Writing for the court, Judge Kelly held that the statutory language did not restrict the fee to passengers who physically travel. The court noted that the statute tasks air carriers with collecting fees from those who sell tickets for transportation, regardless of whether the passenger ultimately flies.
The court further determined that expired credit shells did not constitute refunds under the Act. Because Frontier booked the value of the unused credit shells as revenue rather than returning the funds to the passengers, the airline had not repaid the fees. Consequently, the fees remained payable to the TSA.
Frontier also argued that the fair-notice doctrine barred the TSA from imposing liability for transactions that occurred before the agency clarified its position on credit shells. The court rejected this argument, finding that the statutory and regulatory scheme clearly required airlines to remit collected fees unless they were refunded to the purchaser.
The petition for review was denied.