Tuesday Jul. 26, 2011 @ 12:47 am By

This past Friday, Congress failed to approve the extension of a bill to keep the FAA in business. This means that the agency no longer had the authority to impose the various federal taxes that airlines add to the price of each ticket we buy. These taxes average somewhere between $25 – $50 roundtrip (7.5 percent excise tax on all domestic tickets, $3.70 federal charge on each flight segment, $16.30 tax on each international arrival and departure). What one would expect, after all these years of recouping that tax they paid by passing on the cost to us buyers, they would pass on the savings to us and stop collecting the taxes they no longer had to pay. But to much shock and surprise (insert sarcasm here), they in fact did not stop adding the cost and pass the savings on to the consumer, but instead none lowered their prices and some bumped their prices on average about the same cost as the fees they no longer have to pay.

According to the NYT, “Airlines have long complained about the burden of taxes and government-imposed fees, which now add up to about $61 on an average $300 fare, according to the Air Transport Association. While airline revenue was 8 percent higher this June than in June 2010 — the 18th consecutive month of year-on-year improvement — growth had been slowed by rising fuel costs, the association said.”

So in the end, at the very least, we are paying the same as we did before the FAA closed it’s doors, despite the fact the airlines are saving in taxes they no longer have to pay.

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