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Old 07-25-2011 | 07:15 PM
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Default AK and VX Are The Only Ones ...

... not grabbing the tax savings, that is. Well, Spirit and Hawaiian, too.

From Associated Press:
The great tax holiday of 2011 for air travelers is just about over.
By Monday, most U.S. airlines had raised fares to reap the benefit of lower federal taxes on airline tickets. A few airlines that were passing the savings of about 7.5 percent on to consumers changed their minds. However, Alaska Airlines, Spirit Airlines and Hawaiian Airlines continued to pass the tax savings onto passengers, as is Virgin Airlines on flights out of Seattle and Mexico.
Several federal taxes on airline tickets expired over the weekend after Congress failed to pass legislation to keep the Federal Aviation Administration running at full speed.
Raising the fares allows the airlines to charge the consumer the same amount as before, while pocketing money previously collected for the government.

It could turn into a windfall for airlines if the stalemate in Congress drags on. The government estimates that the expiring taxes total $200 million a week. And with fuel prices much higher than last year, airlines can use the cash.
But some travel experts called the fare increases a public-relations mistake.
"One of the major airlines could have said, 'Hey, at least for a week we're going to give this money back to the consumers,"' said Rick Seaney, who tracks prices as CEO of FareCompare.com. "I'm surprised no one made promotional hay over this."
Airlines collect various federal fees, including a 7.5 percent tax on all tickets that expired at midnight Friday night. Once the taxes expired, airlines began raising fares by an equal amount. On some tickets, the expired taxes can top 10 percent of the price.
US Airways and American Airlines were the first to raise fares. They were joined quickly by United, Continental, Delta, Southwest, AirTran and JetBlue.
Virgin America, which at first passed the savings on to consumers, changed its mind by Monday on most routes, but spokeswoman Abby Lunardini said the airline would continue passing on the 7.5-percent tax savings on flights out of Seattle and Mexico. Alaska Airlines, Spirit Airlines and Hawaiian Airlines also said Monday they were continuing to pass on the tax savings.
Alaska Airlines spokeswoman Marianne Lindsey said the airline "saw a noticeable increase in bookings over the weekend."
A spokeswoman for the Air Transport Association, a trade group for major U.S. airlines, said consumers will benefit if the tax savings increase airline profits.
"This short-term additional revenue for airlines, which does not mean a fare increase for consumers, benefits all stakeholders — customers, employees and investors — by temporarily improving tiny industry margins to better cover costs and enable airlines to invest in their product and service," the spokeswoman, Jean Medina, said in an email.
George Hobica, founder of travel website airfarewatchdog.com, said stores don't raise prices during tax holidays, and neither should airlines.
"It seems predatory," he said. "I realize the airlines have to make money, but this is kind of a cheap shot. It's tone-deaf."
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Old 07-25-2011 | 08:15 PM
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Once the FAA finally gets their funding, I have a feeling the airlines will still be on the hook for the taxes.
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Old 07-25-2011 | 08:20 PM
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Originally Posted by Spicy McHaggis
Once the FAA finally gets their funding, I have a feeling the airlines will still be on the hook for the taxes.
Bingo-they are taking a huge risk by not collecting taxes. If the FAA decides they want em, then those who raised fares will have already collected. Could be very painful for spirit and vx.
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Old 07-26-2011 | 04:53 AM
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Not really. You can't make ex post facto laws. If the legislation has expired, the tax collection can only begin when the legislation is reestablished.
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Old 07-26-2011 | 04:57 AM
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Originally Posted by Fishfreighter
Not really. You can't make ex post facto laws. If the legislation has expired, the tax collection can only begin when the legislation is reestablished.
Exactly. This is nothing but corporate greed...anyone surprised?
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Old 07-26-2011 | 05:12 AM
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What this thread should REALLY be titled is:

Alaska, Hawaiian, and Spirit Airlines are the only ones

Virgin? They raised their fares, and only give the 'discount' where they compete directly against Alaska - ie, Alaska's price is lower, so Virgin kept their price lower in order to compete. So, in short, Virgin is gouging the customer as much as they can.

As to the comments that these taxes will apply retroactively, they won't. A company is prohibited from assessing a tax that doesn't exist. Since the FAA bill expired, the authorization to tax also expired. Can a store increase the sales tax they charge by 20% and then pocket it for themselves - of course not, and neither can an airline. An airline (or a store) can raise the price 20%, though.

Passengers who bought tickets before this weekend but travel during the FAA shutdown could be entitled to a refund of the taxes that they paid, said Treasury Department spokeswoman Sandra Salstrom. She said it's unclear whether the government can keep taxes for travel at a time when it doesn't have authority to collect the money.
The biggest news here: Southwest airlines raised their ticket prices (by $8, across the board) - who doesn't LUV that?
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Old 07-26-2011 | 05:55 AM
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I don't blame any of them...what other industry operates on such slim profit margins? I want my airline to make profits.

"Nothing personal...it's just business." The Godfather
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Old 07-26-2011 | 09:54 AM
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Originally Posted by Sniper
Virgin? They raised their fares, and only give the 'discount' where they compete directly against Alaska - ie, Alaska's price is lower, so Virgin kept their price lower in order to compete. So, in short, Virgin is gouging the customer...... LUV that?
Excellent point.
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Old 07-26-2011 | 10:04 AM
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Originally Posted by captscott26
Exactly. This is nothing but corporate greed...anyone surprised?
What the .....

The airlines are simply charging what their product is worth! Our industry is OVER taxed ... more so than most any other industry.

This is proof positive that without high government taxes, business prospers.

Three airlines decided to drop fares. They probably sold more tickets than usual because of this.

Now, if we can just keep Uncle Sam from stealing and blowing our hard earned money !!!
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Old 07-26-2011 | 11:25 AM
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Is this thread actually complaining about airlines making money??? Really??? Don't like the price then don't buy the ticket. I'm personally sick of people complaining about prices, bag fees and etc... It is a business that is suppose to make money not a federal program.

Now what mgmt does with the money is another story.

Last edited by flybynuts; 07-26-2011 at 01:43 PM.
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