Airlines away wit da money!

lajikal

Registered User
Aug 6, 2009
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#1
Dallas --

Airlines are tossing consumers aside and grabbing the benefit of lower federal taxes on travel tickets.

By Saturday night, almost all the major U.S. airlines had raised fares to offset taxes that expired the night before.

That means instead of passing along the savings, the airlines are pocketing the money while customers pay the same amount as before.

American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue all raised fares, although details differed. Most of the increases were around 7.5 percent.

Only a few airlines were still passing the tax break on to passengers Saturday night, including Virgin America, Frontier Airlines and Alaska Airlines.

The expiring taxes can total $25 or more on a typical $300 round-trip ticket. They died after midnight Friday when Congress failed to pass legislation to keep the Federal Aviation Administration running.

That gave airlines a choice: They could do nothing - and pass the savings to customers - or grab some of the money themselves.

Tom Parsons, who runs the Bestfares.com travel website, said consumers should get the tax break.

"Why would the airlines deserve it?" he said. "They already hit us with enough fees. Now they're keeping the government fees too."

Congress failed to pass the FAA legislation because lawmakers couldn't break a stalemate over a Republican proposal to make it harder for airline and railroad workers to unionize. Air traffic controllers stayed on the job, but thousands of other FAA employees were likely to be furloughed.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/07/23/MNOT1KE977.DTL

This shit is bound to get worse :icon_cool
 

VMS

Victim of high standards and low personal skills.
Apr 26, 2006
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#5
Eh. The airlines aren't really profitable, anyway. Even if they are profitable this year or last year (I won't bother to check) over the long term they've never really been profitable.

It's a really shitty industry to be in.

This was just a way for the airlines to increase profitability (or decrease lack of the same) without directly raising prices on the consumer.

Not a "good neighbor" move, to be sure, but a fairly understandable one.
 

Norm Stansfield

私は亀が好きだ。
Mar 17, 2009
15,949
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#9
Start an airline, make tickets really cheap. Problem solved.

What's that? You have no idea how to do that? You don't have the financial means or management experience to dig a hole in the ground and run it as a public toilet, let alone start an airline? All you can do is talk shit about how others are charging you too much for flying you around the planet?
 
May 24, 2004
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Queens, NY
#10
I recently read an article about the best times to book plane tickets in order to save money (what days of the week/month to book and how far in advance to book). I don't remember what the article recommended, and I can't find the article anymore. But you can save some bennies if you time your purchase right.

Still, it's gotten ridiculous, but flying is dangerous anyway. Anyone who says flying is the safest way to travel has obviously never been in a plane crash.
 

MayrMeninoCrash

Liberal Psycopath
Dec 9, 2004
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#11
Buying an airline ticket is like writing a check to the IRS. There's no happy alternative but you just know you're getting royally shafted.

I recently read an article about the best times to book plane tickets in order to save money (what days of the week/month to book and how far in advance to book). I don't remember what the article recommended, and I can't find the article anymore. But you can save some bennies if you time your purchase right.
Tuesday AM (after 12 Midnight on the East Coast), the airlines usually reset their fares. I've seen tickets drop $100 by waiting a couple hours between Monday and Tuesday's prices.

Still, it's gotten ridiculous, but flying is dangerous anyway. Anyone who says flying is the safest way to travel has obviously never been in a plane crash.
No one in the United States died in a commercial plane crash in 2010. Meanwhile 50,000 people died in car crashes. Which is safer?
 

Party Rooster

Unleash The Beast
Apr 27, 2005
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#12
Tuesday AM (after 12 Midnight on the East Coast), the airlines usually reset their fares. I've seen tickets drop $100 by waiting a couple hours between Monday and Tuesday's prices.
And the best days to travel are Tuesday and Saturday. That's why the 9/11 hijackers picked a Tuesday so there'd be less people on the flight to foil their plans.

No one in the United States died in a commercial plane crash in 2010. Meanwhile 50,000 people died in car crashes. Which is safer?
I think you just got trolled.
 

whiskeyguy

PR representative for Drunk Whiskeyguy.
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#13
These taxes expired due to a stalemate in congress. Does anyone really believe they wont be reinstated at some point?

You guys expect the airlines to spend money to reconfigure their entire pricing structure for what could be a month or less without taxes... only to raise them again when the tax is reinstated and then face the complaints of airlines raising their fares again (even through they're just returning to previous levels)?

Or does it make more sense to keep fares constant, so that no fluctuation will be noticed when the taxes are reinstated, the airlines can generate a little more much-needed income without costing the consumer more money (only the government looses), and do all this without 90% of the population noticing?
 

MayrMeninoCrash

Liberal Psycopath
Dec 9, 2004
24,337
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#16
These taxes expired due to a stalemate in congress. Does anyone really believe they wont be reinstated at some point?

You guys expect the airlines to spend money to reconfigure their entire pricing structure for what could be a month or less without taxes... only to raise them again when the tax is reinstated and then face the complaints of airlines raising their fares again (even through they're just returning to previous levels)?

Or does it make more sense to keep fares constant, so that no fluctuation will be noticed when the taxes are reinstated, the airlines can generate a little more much-needed income without costing the consumer more money (only the government looses), and do all this without 90% of the population noticing?
Based on that thought, lowering taxes will never have a positive effect on the economy because at some point in the future those taxes may be raised again and we can't sit idly by while companies expend much needed resources changing their prices.
 

VMS

Victim of high standards and low personal skills.
Apr 26, 2006
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#17
Based on that thought, lowering taxes will never have a positive effect on the economy because at some point in the future those taxes may be raised again and we can't sit idly by while companies expend much needed resources changing their prices.
You see, Mayr, you just made the argument for making the Bush Tax Cuts permanent!

Thank you!
:action-sm
 
Jun 2, 2005
15,516
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Dallas
#18
Eh. The airlines aren't really profitable, anyway. Even if they are profitable this year or last year (I won't bother to check) over the long term they've never really been profitable.

It's a really shitty industry to be in.

This was just a way for the airlines to increase profitability (or decrease lack of the same) without directly raising prices on the consumer.

Not a "good neighbor" move, to be sure, but a fairly understandable one.
Notice Southwest is both profitable, and not mentioned in the story one way or another. Also, based in Dallas where the story originated.
 

the Streif

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#19
Notice Southwest is both profitable, and not mentioned in the story one way or another. Also, based in Dallas where the story originated.
American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue all raised fares, although details differed. Most of the increases were around 7.5 percent.
:popcorn:
 

whiskeyguy

PR representative for Drunk Whiskeyguy.
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Jan 12, 2010
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#20
Based on that thought, lowering taxes will never have a positive effect on the economy because at some point in the future those taxes may be raised again and we can't sit idly by while companies expend much needed resources changing their prices.
You see, Mayr, you just made the argument for making the Bush Tax Cuts permanent!

Thank you!
:action-sm
Haha, so much this. Taxes have to be lowered and businesses have to expect that to last for a reasonable amount of time.
 

Party Rooster

Unleash The Beast
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#24
Delta Will Refund Ticket Tax Payments

Other airlines still pondering how to handle unexpected windfall

08/02/2011 | Truman Lewis | ConsumerAffairs.com

After a scolding from the Internal Revenue Service (IRS), Delta Air Lines says it will process tax refunds for customers who were charged for a federal tax on airline tickets that lapsed when Congress failed to renew it.

Other airlines are still trying to figure out what to do about the unexpected windfall, which occurred after Congress failed to vote on extending the federal ticket tax, which amounts to about $61 on a $300 ticket.

Customers who purchased a ticket before July 23 paid a tax that is no longer in effect. The IRS said airlines should return the money to consumers.

"The IRS will continue to work with the airline industry to address issues relating to the collection and payment of the taxes involved,” the agency said in a July 28 statement. “Taxpayers do not need to take any action at this time. The IRS will provide further guidance on this issue in the near future.”

But, as always, there's a catch, the IRS warned. If you buy a ticket before the tax is reinstated but travel after it goes back into effect, what happens?

Answer: Nobody knows.

"The legislation could either impose tax on all travel occurring after its enactment or provide an exemption for passengers who purchased tickets during the period when the tax was not in effect," the IRS said in a statement on its Web site.

Delta had originally said it would book $4 million to $5 million in additional daily revenue and had no plans to change its ticket prices, even though the tax was no longer in effect. Now the airline says it will issue refunds.

Alaska Air says it wants to make it easy for customers to get refunds but hasn't figured out how to process it through its ticketing system. Other airlines are still studying the issue.

Meanwhile, the unintended bonanza for passengers is putting a kink in airport operations. The Federal Avaiation Administration (FAA) has furloughed more than 4,000 employees in 35 states and halted numerous construction projects at airports around the country.

“I’m very disappointed that Congress adjourned without passing a clean extension of the FAA bill,” U.S. Transportation Secretary Ray LaHood said last week. “Because of their inaction, states and airports won’t be able to work on their construction projects, and too many people will have to go without a paycheck. This is no way to run the best aviation system in the world.”

The Republican-controlled House of Representatives declined to approve the reauthorization unless new rules were adopted to make it more difficult for FAA personnel to unionize.
http://www.consumeraffairs.com/news04/2011/08/delta-will-refund-ticket-tax-payments.html
 

whiskeyguy

PR representative for Drunk Whiskeyguy.
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#25
Meanwhile, to accommodate for the increased cost in handling rebate transactions, the airlines will have to increase costs in a month or two anyway.

Then, in a month when the tax is reinstated, travelers will complain about increased ticket prices (even though it's to previous levels).