11th Circuit Rules Spirit Airlines Must Pay Withheld TSA Security Fees

This article summarizes reporting by Courthouse News and Kayla Goggin.

The 11th U.S. Circuit Court of Appeals has unanimously ruled that Spirit Airlines must remit withheld Transportation Security Administration (TSA) security fees to the federal government. According to reporting by Courthouse News, the withheld amount is over $2.8 million, while secondary industry research specifies the exact penalty at $2.84 million. The legal dispute centered on whether airlines are permitted to keep the “September 11th Security Fee” collected from passengers who cancel their flights and subsequently allow their travel credits to expire unused.

The April 13, 2026, decision establishes a significant legal precedent that could reverberate throughout the aviation industry. The ruling directly impacts other major U.S. carriers who are currently fighting similar multi-million-dollar penalties in other federal appellate courts. As noted by Courthouse News, the appellate panel refused to disturb the TSA’s determination, affirming that airlines cannot unilaterally retain these federal funds as corporate revenue.

This legal battle unfolds against a backdrop of broader funding challenges for the Department of Homeland Security. Courthouse News reports that the ruling comes after weeks of long wait times at airport security checkpoints nationwide, exacerbated by stalled congressional negotiations over funding that led to a partial shutdown of the department since February.

The Mechanics of the September 11th Security Fee

Origins and Collection

Following the terrorist attacks on September 11, 2001, Congress mandated a security service fee on air passengers to help fund airport security operations. According to Courthouse News, the fee is currently capped at $5.60 per one-way trip and $11.20 for round trips originating from a U.S. airport. Airlines are required to collect this fee from customers at the time of ticket purchase and pass the collected funds along to the TSA on a monthly basis.

The Cancellation Loophole and the 2019 Audit

The core of the dispute involves the handling of these fees during flight cancellations. When a customer cancels a flight, Spirit Airlines typically deducts a cancellation fee and issues the remaining balance as a travel credit. Secondary industry research notes these credits expired after 60 days. If the passenger never used the credit, Spirit retained the full value of the ticket, including the prepaid TSA security fee, and booked it as corporate revenue rather than remitting it to the TSA or refunding the passenger.

A 2019 audit conducted by U.S. Customs and Border Protection, which reviewed ticket sales between 2016 and 2018, uncovered this practice. Courthouse News reports that the audit determined Spirit had under-remitted security fees by retaining the amounts attributable to expired credits. The audit clarified that an expired credit does not qualify as a valid refund under federal guidelines.

The 11th Circuit Ruling and Legal Arguments

The Court’s Decision

On Monday, April 13, 2026, a bipartisan three-judge panel of the 11th Circuit delivered a unanimous decision against the budget carrier. The panel consisted of Chief U.S. Circuit Judge William Pryor, U.S. Circuit Judge Andrew Brasher, and U.S. Circuit Judge Nancy Abudu. According to Courthouse News, the court ruled that Spirit violated federal law by retaining the fees and rejected the airline’s petition to review the TSA’s findings.

“Spirit had fair notice that it could not retain the disputed funds,” wrote Chief Judge Pryor, according to Courthouse News.

The court explicitly stated that under federal law, airlines must remit any collected amounts to the administration unless the TSA grants a refund.

Competing Legal Interpretations

Spirit Airlines argued that the law imposes the fee on passengers in air transportation. Therefore, the airline claimed that a customer who cancels their ticket and never flies never actually becomes a passenger and does not owe the fee for security services they never utilized. Furthermore, Spirit contended that by issuing a travel credit, the fee was effectively refunded to the customer at the time of cancellation.

The government countered that the statute requires all collected fees to be remitted to the agency by the end of the following month, regardless of whether the travel actually occurs. During oral arguments, Justice Department attorney Weili Shaw highlighted the financial reality of the situation. According to secondary industry research, Shaw noted that the money ended up in Spirit’s pocket as revenue and that actual refunds did not occur. The TSA maintains that if a passenger does not travel, the agency retains the statutory discretion to provide a refund, but airlines cannot unilaterally keep federal funds.

Industry-Wide Implications and Broader Context

A Massive Legal Battle

This ruling is not an isolated incident; it is part of a broader TSA enforcement initiative that has triggered a massive legal battle across the U.S. aviation industry. Airlines for America (A4A), the major airline trade association, intervened in the Spirit case. According to secondary industry research, the association argued that the TSA is enforcing a previously unannounced interpretation to secure a windfall for security services it never provided.

Other major airlines are fighting similar battles in different jurisdictions. According to secondary industry research, Southwest Airlines is currently contesting a massive $48 million TSA penalty in the 5th Circuit Court of Appeals. During oral arguments in January 2026, 5th Circuit judges expressed open skepticism toward the TSA’s position. Reports indicate that judges laughed when the TSA admitted it lacked the operational capacity to process millions of individual cash refunds directly to consumers.

Additionally, secondary industry research indicates Alaska Airlines and Allegiant Travel Co. filed petitions for review against the TSA in the 9th Circuit Court of Appeals in February 2025, while Frontier Airlines filed a similar petition in the 10th Circuit Court of Appeals during the same month.

AirPro News analysis

We observe that this ruling highlights a significant consumer protection angle. For years, airlines have quietly converted millions of dollars in government-mandated security fees into corporate revenue when passengers fail to use expiring travel credits. The 11th Circuit’s decision firmly closes this loophole, ensuring that federal fees are either remitted to the government or properly refunded to the consumer.

Furthermore, the contrast between the 11th Circuit’s definitive ruling against Spirit and the ongoing 5th Circuit case involving Southwest Airlines points to a looming circuit split. If the 5th Circuit rules in favor of Southwest, especially given the judges’ reported skepticism regarding the TSA’s refund processing capabilities, it could create conflicting legal precedents that might eventually require Supreme Court intervention.

Finally, the financial strain on Spirit Airlines cannot be ignored. The carrier is currently operating under Chapter 11 bankruptcy protection. While a sudden $2.84 million liability is relatively small in the grand scheme of airline revenues, it adds another layer of financial and regulatory pressure on the budget carrier during a highly sensitive restructuring period.

Frequently Asked Questions (FAQ)

What is the September 11th Security Fee?

The September 11th Security Fee is a government-mandated charge collected by airlines from passengers to fund TSA airport security operations. It was implemented following the 9/11 terrorist attacks and is currently capped at $5.60 per one-way trip and $11.20 for round trips originating from a U.S. airport.

Why was Spirit Airlines ordered to pay a penalty?

A 2019 audit by U.S. Customs and Border Protection found that Spirit Airlines had retained over $2.8 million in TSA security fees from passengers who canceled their flights and let their travel credits expire. The 11th Circuit Court of Appeals ruled that Spirit must remit these funds to the federal government, as expired travel credits do not constitute a valid refund.

Are other airlines facing similar TSA penalties?

Yes. Several other major U.S. carriers, including Southwest Airlines, Alaska Airlines, Allegiant Travel Co., and Frontier Airlines, are currently fighting similar multi-million-dollar TSA penalties in various federal appellate courts across the country.

Sources: Courthouse News