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Airlines snatch ticket tax

By Associated Press

POSTED:
LAST UPDATED: 02:26 p.m. HST, Aug 05, 2011



DALLAS » The great tax holiday of 2011 for air travelers is just about over.

Several federal taxes on airline tickets expired during the weekend after Congress failed to pass legislation to keep the Federal Aviation Administration running at full speed.

Raising the fares allows the airlines to charge the consumer the same amount as before, while pocketing money previously collected for the government.

It could turn into a windfall for airlines if the stalemate in Congress drags on. The government estimates that the expiring taxes total $200 million a week. And with jet fuel prices much higher than last year, airlines can use the cash.

As of midday Monday nearly all large U.S. airlines had raised prices, but fare watchers said Alaska Airlines, Hawaiian Airlines, go! Mokulele and Spirit Airlines had not. The CEO of Spirit, a small, low-fare outfit that accounts for less than 1 percent of the market, said the industry looked bad.

"The taxes that Spirit and all the other airlines collect don't belong to us," Ben Baldanza said.

"It's the taxpayers' money. It was never Spirit's money. It would be a grab to take that money."






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