Airline Surcharges

I’m remembering the foolishness regarding the new tax on airline tickets that occurred during the budget negotiations. The following will refresh your memory.

The airlines said they’re barely keeping their heads above water. And although we don’t like the increases in ticket prices, a company must make money to survive so there should be some profit (however I don’t believe they have to be huge). The FAA was to charge airlines new fees/taxes (non-commercial jet fuel, aviation gasoline, flights between Alaska & Hawaii, take-off segment tax on a round trip connecting flight, international departure/arrival, domestic transportation, and purchase of air miles). These new taxes were to amount to $200 million a week or $30 million in a day at the peak of the travel season (not continuous).

Rick Seaney of FareCompare.Com told GMA, within less than a week, that the part of the FAA charged with collecting the new fees was shut down since July 22^nd because of the government’s dysfunction. The airlines increased tickets prices and the tax savings from the FAA shutdown was not being passed on to the consumer. I do understand the airlines programming their system to include the new taxes. We all know the government would not be forgiving if the collections occurred as scheduled and the airlines weren’t ready to collect. I wasn’t sure this was an atrocity or not. I did not know if the airlines would be subject to retroactive payment of the taxes once the government got its act together. Yes, I heard Ray LaHood, US Secretary of Transportation, say – if they can’t collect the tax, those charges should not be on an airline ticket; it’s not fair to the flying public. The Secretary did not say the airlines would not have to pay said taxes in the future so I still didn’t know if the airlines would or would not be responsible for paying the tax money they were collecting and pocketing. Senator Jay Rockefeller, Chair of the Commerce, Science & Transportation Committee, said he was offended and thought it was shameful on their part. The Secretary, Mr. Seaney, Mr. Rockefeller nor the news media confirmed the final outcome of the taxes being collected prior to putting the people in an uproar. Until the government got its act together I therefore would not know whether or not to agree with Mr. Seaney and find that the airlines took a ‘cheap shot’. Steven Lott, the Spokesman for the Air Transport Association, told Lisa Stark of ABC that airlines regularly raise fares and adjust their pricing, that’s just the way the market works.

My issue is with the lawmakers; they got a budget and walked away. They left 4,000 FAA and 70,000 contractors hanging, many projects undone and most of all denied the government $30 million a day in revenue because they didn’t want to spend $16 million in a year to fund rural airports. This obviously made no sense to me or anyone else. If it wasn’t for the media pushing this issue the bill reinstating the FAA collections would have gone on past August 5^th and the loss of $420 million in revenue would have been more than a billion dollars.

I decided I shouldn’t be angry with the airlines for being prepared to give the government the fee/tax money as the government could have required them to pay it retroactively. I say do the math before you stand so strong and leave something so ridiculous hanging just to prove a point; the only atrocity I found was with the government’s behavior. 

FYI – There will be no message tomorrow. In support of the 99% protesters a message has gone worldwide for a communications blackout for one day – October 28, 2011. This blackout includes no TV, radio, any phone, or internet use. The complete blackout actually asks for people to refrain from doing any kind of business. Protesters would like you to Occupy Yourself, read a book, do a puzzle, play with your children, meditate, etc.; anything that does not put money into the hands of business or the government.