Tuesday, April 17, 2012

Airline Fees and Taxes

When Allegiant recently joined Spirit Airlines for the once unthinkable-notion of charging for carry-on baggage, some thought fees had reached their ultimate end. Perhaps not so.

The fees are small and none of the major competing airlines have followed their example, but this might change.

It took 20 months for the contagion of carry-on fees to spread from Spirit to Allegiant. How long will it take to jump to a bigger airline? 

You only have to look to Irish carrier Ryanair to see the endless possibilities to charge passengers supplementary fees. It charges fees for processing credit cards, for checking-in luggage, for printing boarding passes, for seat selection, the list goes on and on. 

Airlines are also developing sophisticated new technologies that personalize ticket buyers, including the fees they will pay.

There’s no predicting what new fees will pop up, but they will probably be coming soon. 
However, airlines are at least fighting for the reduction in passenger taxes, another unwelcome addition to ticket prices. The airline trade organization Airlines for America (A4A) and a coalition of other interested groups says passengers are overtaxed.

In a campaign clearly timed to coincide with this month’s deadline for filing  federal income tax returns, they’ve called on Congress to "reform" the way the government taxes US fliers.

The aviation industry and their passengers currently pay 17 separate federal taxes and fees, a hodgepodge thrown together and added to over the years without any guiding rationale or consideration for their overall impact on demand or affordability. 

A4A says a chart on its web site shows taxes on air travel jumped from $5 in 1972 to $17 this year.

Those taxes can raise the cost of a round-trip airline ticket by 20%. 

But more taxes may be coming.  The Obama administration’s deficit reduction plan calls for raising the passenger security fee of up to $10 per flight to $14. Future increases may also be on the horizon.

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Rawhide Travel and Tours Inc
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Glendale, Arizona  85308-3793

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