Congress let authorization lapse Friday for the Federal Aviation Administration as part of their debt ceiling tussle. So the airlines dont have to collect a whole bunch of FAA fees. An opportunity to lower prices and give customers a small break, you say? Yeah, right. Please take off the Birkenstocks and the peasant blouse and join the rest of us here in the 21st Century.
Not only are they not passing the savings on to travelers, they raised fees so no one would notice. Maybe they just believe we are so grateful when we're not stuck on the tarmac for three hours due to 'weather' in another time zone or 'mechanical delays' due to defrosting pizza that we'll happily pay extra just to get airborne. JL
Susan Carey reports in the Wall Street Journal:
A raft of taxes on airline tickets expired Friday amid the continuing budget wrangling in Washington, but few passengers will notice. Most carriers promptly raised ticket prices to capture at least some of that money, estimated to be $30 million a day.
The expiration of a bill that would have reauthorized the Federal Aviation Administration to be in full operation resulted in the furlough of 4,000 workers, stopped payments to airport-construction projects and temporarily allowed airlines to stop collecting a number of taxes.
The suspended levies include a 7.5% sales tax on domestic tickets, a $3.70-per-takeoff segment fee, a $16.30 (each way) international arrival and departure tax, and an $8.20 tax for flights linking the U.S. mainland to Alaska and Hawaii. Airlines must continue to collect security fees.
Airlines including US Airways Group Inc., AMR Corp.'s American Airlines, Southwest Airlines Co. and JetBlue Airways Corp. began Friday marking up their fares, although the fares didn't appear to be higher because the totals didn't change, says Rick Seaney, chief executive of tracker FareCompare.com.
Over the weekend, more carriers joined in, including Delta Air Lines Inc. and United Continental Holdings Inc., Mr. Seaney says. By and large, they raised fares 7.5% and added charges of $6 to $12 a ticket to account for the other fees.
FAA air-traffic controllers, who are deemed essential employees, remain on the job.Alaska Air Group Inc., parent of Alaska Airlines, is one of the few to share the windfall with travelers. The Seattle-based company said it didn't raise its fares and is passing along the savings from the lapsed taxes to passengers. On a $300 round trip within the continental U.S., the savings amount to nearly $30, the airline said.
Spirit Airlines, a low-fare carrier based in Miramar, Fla., is also passing along the savings. A ticket that cost $103.70 Friday should now be $92.50, without the 7.5% tax and the $3.70 domestic-segment charge, the company said. The carrier said passengers may be entitled to tax refunds for tickets purchased before Friday for travel after that date, but it said they would have to contact the Internal Revenue Service directly.
Virgin America, a discount carrier based in San Francisco, passed on the tax windfall last weekend. "But given the dynamic nature of fares," a spokeswoman said, Virgin raised many fares Monday to be competitive. She said the carrier is still passing along the tax discount on fares to Seattle and Mexico, which are routes that Alaska Airlines also serves.
Ray LaHood, Secretary of Transportation, said Monday that "if this tax is not being collected, I don't believe the airlines should be charging people this money." Mr. LaHood spoke twice to the airlines' main trade group, the Air Transport Association, to reiterate his position.
The standoff last week followed a dispute between House Republicans and Senate Democrats over a GOP push to cut subsidies to airlines for providing service to small, rural airports.
Congress is expected to eventually agree on a measure to restore the FAA to full operations.
But iThere was also a disagreement over a Republican proposal to make it more difficult for airline and railroad workers to unionize.t remains to be seen if airlines will respond by rescinding the latest fare increases. Carriers, hurt by historically high oil prices, are not only quick to raise fares if they can but are also piling on fees for items like checked luggage, quicker security lines and more desirable seats.
The latest increases are the 15th fare-boost attempt this year, Mr. Seaney says. If this one sticks, it will be the seventh successful effort.
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