john smith
February 27th 07, 04:42 PM
Will FAA's plan to lower airline passenger taxes fly?
Posted February 15, 2007 at 1:57 pm ET by Josh Roberts,
SmarterTravel.com Staff
The FAA reportedly wants to dramatically decrease passenger taxes on
commercial flights. Then again, I want the Red Sox to win the World
Series; doesn't mean it's gonna happen.
The plan calls for a reduction of the international arrival and
departure tax and the elimination of the 7.5 percent ticket tax, the
6.25 percent cargo tax, the 7.5 percent frequent flyer tax, the domestic
segment tax, and the Alaska/Hawaii tax, all effective October 1, 2008.
(No wonder those nebulous airline taxes and fees are so high‹there's
about a million different types.)
To make up for all the lost revenue, the FAA wants to charge all
aircraft with a new user fee and increase government taxes on fuel. The
idea is to distribute costs more evenly between commercial and private
aircraft; commercial carriers argue that they currently pay a
disproportianate share of air traffic costs.
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Now, a word of warning: Don't get too excited about these "tax cuts."
Given the track record of, oh, I don't know, every single airline ever,
this potential reduction of costs is more likely to result in higher
profit margins than it is lower prices. In other words, their cost of
the pie may go down, but don't expect them to pass the savings on to you.
That's if the plan even passes. As you can imagine, with money at stake
there's bound to be some hard lobbying back and forth in Congress before
the plan's final outcome is settled.
Posted February 15, 2007 at 1:57 pm ET by Josh Roberts,
SmarterTravel.com Staff
The FAA reportedly wants to dramatically decrease passenger taxes on
commercial flights. Then again, I want the Red Sox to win the World
Series; doesn't mean it's gonna happen.
The plan calls for a reduction of the international arrival and
departure tax and the elimination of the 7.5 percent ticket tax, the
6.25 percent cargo tax, the 7.5 percent frequent flyer tax, the domestic
segment tax, and the Alaska/Hawaii tax, all effective October 1, 2008.
(No wonder those nebulous airline taxes and fees are so high‹there's
about a million different types.)
To make up for all the lost revenue, the FAA wants to charge all
aircraft with a new user fee and increase government taxes on fuel. The
idea is to distribute costs more evenly between commercial and private
aircraft; commercial carriers argue that they currently pay a
disproportianate share of air traffic costs.
Advertisement
Now, a word of warning: Don't get too excited about these "tax cuts."
Given the track record of, oh, I don't know, every single airline ever,
this potential reduction of costs is more likely to result in higher
profit margins than it is lower prices. In other words, their cost of
the pie may go down, but don't expect them to pass the savings on to you.
That's if the plan even passes. As you can imagine, with money at stake
there's bound to be some hard lobbying back and forth in Congress before
the plan's final outcome is settled.