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Senators beseech airlines to undo fare leap

By Associated Press

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



WASHINGTON » Democrats ratcheted up the pressure on airlines Friday to give back the windfall they've reaped by raising fares during the tax holiday created by the partial shutdown of the Federal Aviation Administration. But it was unclear how much leverage they have to force the issue.

Two more groups of senators sent letters to airline CEOs and other industry officials asking them to roll back fare increases. The FAA's operating authority — and airlines' authority to collect $30 million a day in federal ticket taxes — expired last week as the result of a legislative stalemate between the House and Senate. Within 24 hours most major airlines had raised their fares in amounts roughly equal to the taxes passengers were no longer being charged.

One letter was signed by Finance Committee Chairman Max Baucus of Montana and six other senators, including Commerce, Science and Transportation Committee Chairman Jay Rockefeller of West Virginia. Baucus' committee handles tax issues, including airline ticket taxes, and Rockefeller's committee oversees the FAA. The letter asks airlines to lower their fares in an amount equivalent to the taxes not being charged.

"For some passengers, this could reduce the cost of flying by upwards of 10 percent per flight, or hundreds of dollars for frequent flyers," the letter said.

Airline ticket taxes go into a trust fund that pays for the majority of the FAA's $16 billion budget. The shutdown has forced the agency to furlough 4,000 workers, halt the processing of $2.5 billion in airport construction grants and issue stop-work orders for nearly 200 construction projects, from airport control towers to runway safety lights. The construction industry estimates as many as 70,000 private-sector workers have been, or will likely be, laid off during the shutdown.

Air traffic controllers and safety inspectors, whose salaries are paid with money separate from the trust fund, have remained at work.






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