Buoyed by the success of its PreCheck trusted traveler tests at seven U.S. airports, the Transportation Security Administration announced big plans to expand it to many more airports, and to more airlines’ frequent flyers, in 2012.

The U.S. Customs and Border Protection (CBP) agency’s Global Entry program, which gives frequent international travelers a faster way to get back into the country, has been operating on an experimental basis – until now. The Department of Homeland Security has issued a final rule making the program permanent, clearing the way for its expansion.

For the past five years, the Federal Aviation Administration has had no long-term budget; instead, it has limped along with a series of 23 temporary budget extensions. The budgeting impasse came to a head last fall when Congress’ failure to agree on an FAA budget bill led to a partial shutdown of the agency. But now – miraculously – Congress actually reached a compromise and the House and Senate both passed a bill with a full four years of funding for the FAA, which will enable it to move ahead with some much-needed improvements, like the NextGen navigation system.

In international airline news, two European carriers have run out of money and stopped operating; Qantas debuts new in-flight entertainment technology; and Lufthansa extends “automatic check-in” to 400 routes.

Every few years, the issue comes up: Are airline frequent flyer miles taxable as income? In the latest version of the perpetual question, it appears that some of them might be.

The Los Angeles Times raised the issue when it found out that Citibank was providing airline miles to customers who opened new accounts – and then was reporting the value of those miles to the IRS as miscellaneous income. At the same time, the newspaper said, Citibank was arguing that miles awarded to holders of its credit cards were not taxable.

There’s an old saying in the airline business that you can’t shrink your way to profitability. American Airlines, operating under Chapter 11 bankruptcy, has come up with a unique twist on that thinking: It apparently hopes to grow its operations significantly, but while drastically shrinking its workforce.

In airport news, Las Vegas McCarran International has set the opening date for its new Terminal 3 this summer; Los Angeles International has picked a company to oversee an overhaul of its restaurants and retail outlets; LAN moves to a new terminal at JFK; and San Francisco International has added an unusual new public room for passengers.

In the never-ending battle for market share among what it calls “global mega-travelers,” Starwood Hotels & Resorts is rolling out a new roster of benefits for the top members of its Preferred Guest rewards plan.

In a progress report on the expansion of Economy Plus seating, which offers more legroom in coach, United/Continental said it has finished installing the amenity in one segment of its international fleet.

In U.S. airline news, United Continental Holdings’ latest route announcements include a potential plum for Mileage Plus members; Delta is rumored to be weighing an acquisition of US Airways; Southwest jumps another hurdle on the road to its AirTran merger; and Alaska brings hometown coffee to its passengers.