Click on a label to read posts from that part of the world.
FAA stops collecting airfare taxes -- and the airlines cash in
Recent budget woes in the legislative branch of our US government have been creating a cascade of disruptions, and the most recent hiccup involves the Federal Aviation Administration (FAA). Without proper agreement on a fiscal plan moving forward, the government has been forced to shut down a portion of the agency, most notably the section that collects taxes on our domestic airplane tickets.Those taxes account for a modest percentage of each flight, roughly between 5 and 10%, and when travelers caught wind that the taxes would be discounted, they saw the silver lining of the shutdown as being a temporary sale on domestic tickets.
As planned, the FAA shutdown took place at midnight this morning, but the savings have barely matured. What happened?
Turns out, some of the airlines also realized the gap in price difference and decided to make that up by increasing their fares. So rather than passing the tax savings along to customers, they're greedily taking the margin for themselves.
Not all airlines have reached into our wallets, however, apparently Virgin America has not only refused to increase fares but they've turned the event into a bit of public promotion. Last night the airline had a countdown to tax-free bookings on their sites and as promised, the fares have stayed low. Similarly, United appears to be keeping its fares in place.
On the flip side of the coin? US Airways, American and JetBlue seem to be the leaders in ripping off their consumers. AP has a bit more info if you want to become even more disappointed.
[Flickr image via Fly for Fun]
Reader Comments (Page 1 of 4)
John Jul 23rd 2011 2:45PM
I guess the airlines still have not figured out that their passengers hate them. I tried to buy a ticket this morning, expecting a discount, and found no difference at all. So no ticket. If we had an option like decent train service, our airlines would be out of business.
Marty Jul 23rd 2011 3:14PM
I worked for an airline for 25 years and took early retirment because I got tired of kissing asses of jerks like you
David Jul 23rd 2011 3:20PM
To Marty (below) -
Glad you retired! Passengers paid your wages and indirectly gave you everything you earned and bought (your home, your car, your vacations, your retirement). The only reason you had a job was to meet the passenger's needs. In my business, I've fired staff with attitudes like yours. Perhaps you could get a job with the IRS.
rmrmsix Jul 23rd 2011 3:48PM
Bought 3 tickets today.. One to Las Vegas..2-San Diego.. Saved over $250 in taxes.. and paid for them all.. you need to discover this new idea thing called the internet.. and travel sites.. they are really a pretty good idea!!!
Allison Jul 23rd 2011 3:48PM
Dear Marty:
Assholes like you need to be retired. The only reason you worked for an airline is because you couldn't find a real job. It's people like you with the crappy and "better than god" attitude that makes customers like me look elsewhere for service. I have more respect for Walmart greeters than for you.
You seriously should be thanking me instead of bitching. I paid your salary, for your vacations, and for your retirement. I also helped put your inbred shallow gene pool of offspring through college.
Have a boring and short retirement, dirtbag!
David Jul 23rd 2011 4:27PM
Whether or not the public hates the airlines, some must fly - namely for family emergencies and business. This is what deregulation has brought us! Thank you Jimmy Carter.
Kelly Jul 23rd 2011 5:52PM
Really? 5 - 10% on a $300 ticket is $15 - $30. Not that $30 is nothing, but did that really keep you from taking a trip?
admiralj Jul 24th 2011 1:26AM
That is why the airlines have been fighting high speed rail in this country. Less than 500 miles and the train beats flying hands down. Airlines would be reduced to long haul carriers.
Dmitriy Jul 24th 2011 3:22AM
The world is oppsed with cheap it is unhealty. You probably work for a wall street company payed by taxes too! I would like to see the world sutvive one week wiyhout airlines and I agree 100% with marty
wllharrington Jul 24th 2011 8:19AM
If you would take the train along with all the others who gripe about the plane and then say if trains were better they would ride, then the trains could start to make money. I ride the train as much as possible,, Amtrak has great seating, it is healthier because you can walk around, there is plenty of room for luggage the only real downside is the cost of food and drink but,surprise, you can carry food and drink with you.
Phil Bittle Jul 23rd 2011 2:55PM
ANOTHER REPUBLICAN GOOD MOVE ... THEY HAVE GOT TO BE THE DUMBEST ACT IN TOWN ... !!
JC Jul 23rd 2011 3:57PM
One party is doing something at least looking like fiscal responsibility. That is the Republican Party. Now who's dumb?
BB Jul 24th 2011 5:28AM
Why does a "D" or an "R" have anything to do with this? The Airlines that raised prices shame on them the one that lowered thats great. But I bet when the FAA (big Gov.) backed by big Unions will find some way to collect any and all TAXES, not paid or collected while they are not funded. So I would be prepared for a HIKE in FAA taxes to airlines passed down to the Fliers.
The Truth if you can handle it Jul 23rd 2011 3:15PM
How come government is never called greedy? Democrats have been setting spending policy for the majority of the time since world war two. 14 trillion later and we are no better off and we have 10 million people on SS disability. Its the spending stupid!
timber1647 Jul 23rd 2011 3:26PM
The Dems gave President Bush a surplus the year he came into office. Two tax cuts, two wars and a prescription drug plan later, no surplus. I mean who would have thought the dems were capable of such things............
cat Jul 23rd 2011 3:37PM
lets hear you complain when you're on the dole for retirement or disability. Like most people that worked for 25-30 years or so we paid into it, quit acting like social security is just for welfare recipients it is an insurance every american that pays into earns.
ed Jul 23rd 2011 8:02PM
To Timber1647--A Republican Congress was the reason the budget got better. Along with a surplus so generously given to President Bush he also inherited a recession, the final collapse of the DotCom era, along with the Eron/Wordlcom scandals, 9/11, Katrina, Afghanistan and Iraq. While these things all contributed to a hit on our economy some how President Bush was able to create an economic enviroment that for all of 2006-2007 this country enjoyed a 4.6 unemployment rate. Things went south because of lack of oversight by the Federal Reserve and Barney Franks and Chris Dodds Housing and Finance committies(and all the sub committies). As far back as 2003 President Bush was asking these guys to take a closer look at Freddie and Fannie. They chose not to. Barney Franks went before some committee and stated back in early 2007 that there was nothing wrong with the housing market, by the middle of 2007 the market was in a downward spiral. Again thanks for the surplus.
bigdaddy1710 Jul 24th 2011 4:48AM
ED: The recession officially began in March 2001 and ended November 2001. If you think Bush "inherited" it then you must agree that our most recent recession lasted 15 months under Bush and 7 months under our current president (sonce you don't think Bush was responsible for Dec. 2000 through March 2001 even though he was president). Bush's second recession he didn't inherit "officially" began December 2007. I say "officially" because for almost a year Bush said we were not in a recession because we didn't have two consecutive quarters of negative growth, but most economists said all the other indicators -- such as rising unemployment, which continued upward for 7 months -- indicated that we were more in a recession than in a period of growth. (You might want to look at a chart of the unemployment rate during his tenure. Bush took office when unemployment was 4.2 percent. Thirty months later it was 6.3 percent, and it took him three years to get it back down; then it shot from 4.4 to 8.2 between May 2007 and Feb. 2009, so it almost doubled under Bush.) Things just looked okay because everyone was still spending, going deeply into debt buying stuff that they couldn't really afford, often using the paper equity they had in their homes. And yes, Bush had all those things to contend with, including those two wars OF CHOICE, that added at least $1 trillion to the debt (probably more, since so many of the "special appropriations" that paid for them were not in the budget. As for Bush's great economic climate of 2006-2007, what you're really saying is that Barney Frank was resopnsible for it. The economy was already heading down because it was based on the housing market, not on job growth, wage growth, economic expansion or any other things that indicate a robust economy. The plummeting recession that officially began in 2007 didn't stop freefall until October 2009.
http://data.bls.gov/timeseries/LNS14000000
David Jul 23rd 2011 3:14PM
Once upon a time, airlines treated passengers like guests. Now, they treat us like cattle at a stockyard. When speaking informally to attendants, they seem to uniformly HATE the passengers, just as the TSA workers do.
Mary Jul 23rd 2011 9:39PM
You act and dress like pigs---sooo you are treated accordingly---dress up--take a bath---give us a break!