US Airlines Are Robbing You

Right now, you should be saving $US25 to $US50 when you buy an aeroplane ticket in the US. Why? Because Congress didn't approve a bill to keep the US Fedaral Aviation Administration running, which means the FAA doesn't have the authority to collect taxes on airfare, which should mean no taxes for you! Too bad the airlines are pocketing the difference.

As of Saturday, the FAA and US government is losing out on $US25 million a day in tax revenue, $US25 million of which should technically result in consumer savings but instead is fattening the pockets of airlines. In anticipation of these airfare taxes expiring, airlines shrewdly bumped up their fares "by the same amount as the federal taxes". That means even though there are no taxes for consumers to pay, consumers all still paying the same price as before (with the airlines taking all the 'tax' money). Rick Seaney of FareCompare.com told the New York Times:

"The consumer should have saved anywhere from $US25 to $US50 round trip. Instead, it's a windfall for the airlines."

The taxes that expired were the 7.5 per cent excise tax on domestic airfare, the $US3.70 federal charge per flight segmant and the $US16.30 tax on international arrivals and departure. The taxes can't be collected again until Congress passes another extension of the legislation that finances the FAA. For the record, Spirit and Alaska Airlines have passed on the savings to their customers, so if you're looking for cheaper tickets, start there. [NY Times]

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