Airline passengers can not see the savings in taxes ended
DALLAS – Some airline customers will not see savings this weekend even though several federal taxes on the ticket has expired.
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U.S. Airways and American Airlines raised ticket prices to offset the tax savings.
This means that instead of passing along savings from the tax, is a carrier pocketing the money while customers pay as much as before.
But other airlines left their prices unchanged on Saturday. Consumers can save money by shopping around.
It expired taxes can total $ 25 or more on a typical $ 300 round-trip ticket. For September 1st trip between Dallas and San Francisco, was the cheapest flights on Travelocity.com U.S. $ 24 higher than offers from United, Continental, Delta and Virgin America, which does not raise ticket prices.
Taxes are out after midnight Friday night when Congress failed to enact legislation to keep the Federal Aviation Administration started.
It gave the airlines a choice: They could not do anything – and pass the savings to customers – or they could take some of the money themselves.
"We adjusted prices so the end result the price of a ticket is the same as it was before … the end of federal excise taxes," says American spokesman Tim Smith. U.S. Airways spokesman John McDonald said the same thing – that passengers will pay the same amount for a ticket as they did before the tax expired.
Smith refused to say whether the increase would be repealed if Congress revives travel taxes.
Tom Parsons, who runs Bestfares.com travel website, said consumers should get a break.
"Why should the airlines deserve it?" he said. "They beat us already have enough fees. Now they are keeping the government charges too."
Transport Department says it will lose $ 200 million weeks. JP Morgan analyst Jamie Baker said the airline could take on an extra $ 25 million per day by raising ticket prices during the tax year holiday.
Parsons said the competitive pressures will eventually force airlines to match – either they will all pass tax savings to passengers, or so everyone will raise ticket prices and keep the money themselves.
Spirit Airlines said Saturday that it will go on to customers all the savings, which it said could amount to more than $ 50 per round trip.
Southwest Airlines and its subsidiary, AirTran raised prices by $ 8 per round trip, said spokeswoman Marilee McInnis.
Southwest's support could be crucial if the airlines decide to keep the tax money. Southwest carries more U.S. passengers than any other, and it effectively sets the prices of many lines. Southwest torpedoed attempts by other airlines to raise prices during the past two weeks. CEO Gary Kelly has publicly worried that the airlines could scare off passengers by raising prices too high.
It may be less of a fear this time, however, because consumers would not be shelling out more money for tickets – they just would not get an unexpected discount, courtesy of Congress.
Several federal travel taxes when Congress adjourned for the weekend without passing the FAA regulation. Legislators could not break a stalemate over a Republican proposal to make it more difficult for the airline and railroad workers to unionize.
Air traffic controllers remained on the job, but thousands of other FAA employees were likely furloughed.
Airlines stopped collecting a 7.5 percent ticket tax, a separate excise duty of $ 3.70 per takeoff and landing, and other charges. They add up to about $ 32 on a round trip itinerary with a base fare of $ 240 and a stop in each direction.
Other state fees for security and local airport projects are still underway. They increase the final cost of the $ 240 base fare ticket for $ 300.
Passengers who bought tickets before the weekend, but travel during the FAA shutdown would be entitled to a refund of the taxes they paid, said Treasury Department spokeswoman Sandra Salstrom. She said it is unclear whether the government can keep taxes for travel in a time when it has no authority to collect money.
AP Airlines Writer Joshua Freed in Minneapolis contributed to this report.
Follow David Koenig in http://www.twitter.com/airlinewriter
Copyright 2011 The Associated Press. All rights reserved. This material May not be published, broadcast, rewrite or redistributed.
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Submited at Monday, July 25th, 2011 at 10:00 am on News by hilman
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