Ticket Tax

Bucking the trend, a few airlines Saturday were still passing along the savings to customers after the federal government stopped collecting taxes on airline tickets. But many others raised fares to match the tax drop, which can amount to about $30 on a $300 fare, and a few that had held off on raising fares caved in. The fast-moving developments happened after a divided Congress failed to extend laws that authorized the government to collect the airline ticket tax and other aviation-related taxes.

If you were disappointed by the air ticket tax holiday that wasn't -- because so many carriers offset the drop by increasing fares over the weekend-- check out this near-rant by the chief of a group that represents airports. "So… you might expect that airlines would pass the savings along to the passengers," Greg Principato, president of Airports Council International - North America , posted on his blog Monday. "If you expected that you must have been living under a damn rock.

Secretary of Transportation Federico Pena urged Congress on Tuesday to extend the 10% airline ticket tax to save losses of $1 billion from the Federal Aviation Administration's trust fund. The tax is to expire on Dec. 31. Pena said the loss in tax revenue will cripple airport safety and development programs. He said the nation urgently needs to renew the tax and establish a long-term system to finance the agency in "this time of dynamic aviation growth."

Bucking the trend, a few airlines Saturday were still passing along the savings to customers after the federal government stopped collecting taxes on airline tickets. But many others raised fares to match the tax drop, which can amount to about $30 on a $300 fare, and a few that had held off on raising fares caved in. The fast-moving developments happened after a divided Congress failed to extend laws that authorized the government to collect the airline ticket tax and other aviation-related taxes.

As the federal 10% tax on airline tickets was reimposed Friday, airlines were adjusting fares frequently, and it was unclear whether travelers would have to pay more to fly. Airline spokesmen said that fares were in constant flux and that it would probably be early next week before they stabilized. Several major airlines, including American and United, at first added the tax onto current fares, raising ticket prices 10%.

With athletic and after-school sports programs from elementary schools through colleges imperiled by what the state Department of Finance is calling California's worst economic and fiscal situation since the late 1930s, Assemblyman Steve Clute (D-Riverside) believes the fans of the state's professional sports teams should provide a bailout. Clute is sponsoring AB 694, which would impose a 3% tax on professional sports tickets costing $5 or more to help fund existing school sports programs.

U.S. airline passengers could start paying more for plane tickets within two weeks, after President Clinton signs legislation that includes a renewal of a 10% airline ticket tax. The impact "will be fairly immediate," said Jeffrey Long, an analyst for J.P. Morgan Securities. Analysts speculated that recent air fare sales have been part of an effort by the airlines to sell as many tickets as possible before the tax is renewed.

The nation's airlines have become embroiled in a nasty dogfight over Congress' efforts to extend the 10% airline ticket tax, with ordinary passengers likely to be caught in the cross-fire. The skirmish, which involves sharply differing House and Senate proposals to extend the tax, has the nation's seven largest airlines pitted against discount fliers such as Texas-based Southwest Airlines.

President Clinton signed legislation reinstating a 10% tax on airline tickets for domestic flights. The aviation tax, extended to Sept. 30, also imposes a $6 per-ticket fee on international flights. The tax becomes effective in six days. The ticket tax expired Dec. 31. Its revenues go to the airport and airways trust fund, which is used to pay for improvements to airports and the air traffic control system.

Air travelers, beware. Some fares probably will be rising after a 10% ticket tax is revived in the next week or so--even though base ticket prices reflect the tax already. "It would be surprising if they did not pass it along," said Chris Privett, spokesman for the American Society of Travel Agents. Others said at least some fares are likely to rise, though one airline industry executive suggested competition among airlines would hold down any increases.

Finally, good news from the gridlock in Congress. Or maybe not. The federal government Saturday stopped collecting taxes on airline tickets, so flying suddenly got cheaper, right? Wrong. Many airlines just increased their airfares to match the tax drop. At stake can be about $30 on a $300 ticket, the Associated Press says. What happened is that squabbling lawmakers failed to extend laws that authorize the government to collect the airline ticket tax and other aviation-related taxes.

The Bush administration's long-awaited plan to pay for a new, high-tech air traffic control system would eliminate the passenger ticket tax but raise other costs for people who fly. The Federal Aviation Administration will unveil its proposal today. The announcement is expected to touch off a fierce debate between airlines, which support the concept, and owners of corporate jets and private aircraft, who will pay more to fly in the national air space.

Have you looked at the corner of an airline ticket recently, where the fare, fees and taxes appear to be listed? I have, and most of it was indecipherable to me. One thing I do know: A new fee soon will appear, a "security service fee" of up to $10 per round trip. Congress authorized it in November to pay for aviation security improvements in the aftermath of the Sept. 11 attacks, and it is expected to begin next month.

The nation's airlines have become embroiled in a nasty dogfight over Congress' efforts to extend the 10% airline ticket tax, with ordinary passengers likely to be caught in the cross-fire. The skirmish, which involves sharply differing House and Senate proposals to extend the tax, has the nation's seven largest airlines pitted against discount fliers such as Texas-based Southwest Airlines.

As the federal 10% tax on airline tickets was reimposed Friday, airlines were adjusting fares frequently, and it was unclear whether travelers would have to pay more to fly. Airline spokesmen said that fares were in constant flux and that it would probably be early next week before they stabilized. Several major airlines, including American and United, at first added the tax onto current fares, raising ticket prices 10%.

President Clinton signed legislation reinstating a 10% tax on airline tickets for domestic flights. The aviation tax, extended to Sept. 30, also imposes a $6 per-ticket fee on international flights. The tax becomes effective in six days. The ticket tax expired Dec. 31. Its revenues go to the airport and airways trust fund, which is used to pay for improvements to airports and the air traffic control system.

In the first bite on consumers from the new budget agreement passed in the waning days of the 101st Congress, the federal gasoline tax goes up today by 5 cents a gallon and the airline ticket tax rises from 8% to 10%. The tax increases will add 75 cents to the cost of a 15-gallon fill-up and $6 to the cost of an average airline trip for travelers. For the U.S. Treasury, the two tax changes will add about $37 billion to U.S. government revenues over the next five years.

Have you looked at the corner of an airline ticket recently, where the fare, fees and taxes appear to be listed? I have, and most of it was indecipherable to me. One thing I do know: A new fee soon will appear, a "security service fee" of up to $10 per round trip. Congress authorized it in November to pay for aviation security improvements in the aftermath of the Sept. 11 attacks, and it is expected to begin next month.

Air travelers, beware. Some fares probably will be rising after a 10% ticket tax is revived in the next week or so--even though base ticket prices reflect the tax already. "It would be surprising if they did not pass it along," said Chris Privett, spokesman for the American Society of Travel Agents. Others said at least some fares are likely to rise, though one airline industry executive suggested competition among airlines would hold down any increases.

For a second consecutive New Year's Day, the 10% federal tax on commercial airline tickets is lapsing. Unlike last year, though, travelers won't benefit. The carriers, led by Continental Airlines, already have announced fare increases equal to the anticipated tax cut on 14- and 21-day advanced-purchase tickets. "It's pretty clear they're going to keep the selling price the same and pocket what used to be the tax," said Ed Perkins, editor of the San Francisco-based Consumer Reports Travel Letter.