[Idyllchat] Planning airline ticket purchase - now or later?

Sun Dec 16 14:09:46 EST 2007

Here is an interesting article about something that is beyond the control of even the airlines. (Actually, so very many things are beyond their control....)  It amazes me that they are able to run a profitable business!! (I am a former airline employee)
I saw another article that showed that now, with taxes so high, they are often a greater portion of the final fare than that portion charged by the airline.

Mary

Air travel is taxing in more ways than passengers imagine. Besides the long security lines, overbooked flights and lost baggage, passengers are paying a laundry list of taxes and charges often invisible even to the most seasoned traveler. 
The nation's air transit system is financed primarily through federal excise taxes and other special charges that have collectively generated $117 billion since 1997 - mostly from the pockets of airline passengers. A smaller portion comes from airlines and freight carriers in the form of fuel and cargo taxes, and these costs also are frequently passed along to customers.

The taxes and fees currently attached to each ticket purchase, as compiled by The Associated Press:

Ticket taxes

A 7.5% federal levy is attached to every plane ticket. These are collected by the airlines and passed along to the Internal Revenue Service, which deposits them in the Airport and Airway Trust Fund. A separate Rural Airport Tax of 7.5% is assessed on flights that begin or end at rural airports, but those passengers then are exempt from the other ticket tax and the segment tax. Passengers traveling between the continental United States and Alaska or Hawaii pay an additional $7.50 in taxes. Over the past decade, $49.6 billion has been collected in ticket taxes.

Segment tax

The Passenger Flight Segment Tax, currently $3.40, is charged each time a passenger takes off and lands. Passengers on a non-stop, roundtrip from Los Angeles to New York would pay $6.80, for example, while passengers flying roundtrip from Los Angeles to New York via Phoenix and Kansas City would pay $20.40. The IRS says there's no limit to the number of segments taxed, although it's not collected in cases in which flights are diverted. Since 1997, passengers have paid $14.4 billion in segment taxes, with more than half that collected since 2003. The increased collections are largely attributed to the growth of low-cost carriers that make intermediate stops en route to a passenger's ultimate destination.

International arrival and departure tax

The current tax is $15.10 per passenger on all flights departing for or arriving from foreign destinations. The fee is tied to the consumer price index and has risen 12.7% over the past five years. Since 1997, the tax has raised $12.7 billion.

Security fees

Created by Congress after the 2001 terrorist attacks, these fees cost customers $2.50 per boarding, with a $5 maximum per one-way trip, even with multiple segments. The money - $7.6 billion since collections began in 2002 - is paid directly to the Transportation Security Administration. How the TSA spends the money is something of a mystery. Almost from the day it was established, the agency has been criticized for poor financial management; last November, an independent audit by KPMG harshly criticized the agency for failing to comply with basic accounting practices. In 2005, the TSA was forced to restate its finances due to an "error in accounting for passenger and air carrier aviation security fees."

Passenger facility charge

A local tax collected by airlines and paid directly to the airport where it's levied. Since 1997, this has generated $18.4 billion, largely used for airport construction and other improvements. Another $35 billion still is due on projects already approved by the FAA. The FAA tells each airport how much it can charge - from $3 to $4.50 for each leg of a trip, to a maximum of $18 on a single ticket sale. Nationwide, 365 airports currently charge PFCs, including most of the nation's commercial hubs. This fee could be raised to $6 or more under a new funding proposal. The National Association of State Aviation Officials would like to see it raised to $7.50 to produce additional money for airport improvements and free up money for smaller airports; airlines oppose an increase and say more should be spent on air operations rather than terminal improvements.

  ----- Original Message ----- 
  From: pandjking at sbcglobal.net<mailto:pandjking at sbcglobal.net> 
  To: IdyllChat<mailto:IdyllChat at lists.untours.com> ; Ed Comer<mailto:remocmail-travel at yahoo.com> 
  Sent: Sunday, December 16, 2007 9:14 AM
  Subject: Re: [Idyllchat] Planning airline ticket purchase - now or later?

  To me, it seems a lot like buying gas these days:  if you buy now, you risk 
  the price going down tomorrow, but if you put it off, you risk the price 
  going up even more or running out of gas (i.e. waiting too long to buy your 
  ticket and finding the flights you want are sold out).  If I were you, I'd 
  go ahead and buy now.

  I recently read or heard something to the effect that if you buy tickets in 
  advance and then the rate goes down, the airline is obligated to refund the 
  difference, provided you jump through some hoops to make it happen.  I don't 
  know any of the details, or even if it's true, but it might be worth 
  researching.

  Jane
  Spring Lake, MI

  ----- Original Message ----- 
  From: "Ed Comer" <remocmail-travel at yahoo.com<mailto:remocmail-travel at yahoo.com>>
  To: "IdyllChat" <IdyllChat at lists.untours.com<mailto:IdyllChat at lists.untours.com>>
  Sent: Sunday, December 16, 2007 11:45 AM
  Subject: [Idyllchat] Planning airline ticket purchase - now or later?

  > My wife and I have reserved an UnTour to Meiringen, Switzerland for two 
  > weeks in September/October, 2008. In planning the airfare my past 
  > experience with UnTours and other travel services is that their round trip 
  > airfare from the Southeastern United States to Europe averages in the 
  > $800-$950 neighborhood. I plan on obtaining my own air travel so that I 
  > will have better control over the route and airline, etc.
  >
  > My dilemma is when to make the purchase. I can purchase tickets today from 
  > Asheville, NC or Greenville, SC to Zurich via Atlanta (oddly Atlanta to 
  > Zurich costs more than using it as a stop) for $919 including all taxes 
  > and fees. This price is, in my opinion, comparable to what UnTours would 
  > charge me if I purchased the airfare from them. I am satisfied with this 
  > price, carrier and route but what I cannot decide is if should wait to 
  > closer to the travel date, hoping for a sale while simultaneously risking 
  > a price increase. Consequentially, I am currently sitting on the fence. I 
  > would love to read the opinions of others.
  >
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