Most airlines don't pass along savings

Major airlines are drawing fire from passenger advocates for not passing along to travelers a temporary tax saving resulting from the partial shutdown of the Federal Aviation Administration.

Congress missed its deadline Friday to reauthorize FAA funding and allow the government to collect airline ticket taxes that would total about $30 on a $400 domestic round trip, more on international trips. The funds are used mostly for airport and air traffic control improvements and to pay salaries of certain FAA workers.

Instead of passing the savings along to passengers, most major U.S. airlines simply raised fares by a like amount. It's unclear if the fares will be rolled back if collection of the taxes resumes.

David S. Stempler, president of the Air Travelers Association, an advocacy group based in Chevy Chase, Md., said "We think the funds ought to go into the public coffers for the promotion of passenger safety and not into the pockets of the airlines.".

The Treasury Department says the taxes not being collected include a 7.5 percent charge on the base ticket price, a $3.75 "segment" tax for each leg of a domestic flight; a $16.30 tax on international tickets; an $8.20 tax for flights beginning or ending in Alaska or Hawaii; and a 7.5 percent tax on the value of air miles, such as from credit cards.

At Courtyard Travel in Great Neck, general manager Greg DeClemente said the average domestic fare is about $400 roundtrip so that the 7.5 percent excise tax would amount to $28. "There are so many ancillary fees and taxes that it's really confusing," he said. "I don't know if the consumer has a full idea of what they're paying for." An international ticket, he said, averages $800.

Rick Seaney, chief executive of FareCompare.com, said consumers would have saved 10 to 15 percent off the cost of tickets if the tax windfall had been passed along.

The airline industry's major trade group, the Washington-based Air Transport Association, said "consumers were not impacted over the weekend, generally paying the same final price today as they did before the tax lapse." It also said the carriers lost a combined $54 billion in the past decade and, while the industry was profitable last year, it lost $1 billion in the first quarter of this year, mostly because of the cost of jet fuel.

Meanwhile, about 4,000 FAA workers were furloughed Monday, including 101 in Queens, 16 in Garden City and six in Ronkonkoma.

With AP and Reuters