Cordele Dispatch, Cordele, GA

Homepage

October 22, 2012

As airlines raise fees instead of fares, taxpayers pick up tab

WASHINGTON — For those who fly, the squeeze has become the way to beat the system.

"We take the maximum amount on board and squeeze it in," said Susan Williams, explaining how she and and her family avoid baggage fees on flights from Reagan National Airport.

The art of the squeeze is a matter of measurements. When Ross Davis flew to San Francisco last week he paid $25 to check his larger bag but squeezed his other bag, five inches smaller, into the overhead compartment.

American taxpayers are feeling the squeeze, too, even those who never board an airplane.

When the major airlines began charging fees for baggage a few years ago, the rationale they announced was straightforward: Fuel prices had spiked dramatically. Rather than increase ticket prices just as dramatically, airlines would charge for baggage.

Since then, they have collected $12.8 billion for something that once was free.

That has allowed the major airlines — called the legacy carriers — to keep their ticket prices competitive with low-cost airlines.

For taxpayers, however, here is the catch:

There's a 7.5 percent federal tax on every airline ticket. The money goes into a fund that pays for the air transportation system: airports, capital improvements and the operation of the Federal Aviation Administration (FAA).

But in nine of the past 11 years, the amount of money flowing into that fund — mostly ticket-tax revenues — has fallen short of projections. When that happens, Congress can increase general fund contributions to cover the FAA's budget. In both fiscal 2009 and 2010, Congress appropriated an additional amount of almost $1 billion.

When the airlines kept ticket prices down by shifting $12.8 billion to baggage fees, they also saved almost $964 million in federal taxes they would have owed if they had hiked ticket prices by that amount.

Was it a windfall, or was it salvation for a beleaguered industry?

Text Only
Local news
Book signing

Murray Stephens of Vienna (l) happily holds up her copy of “Captains at Rest” as she waits for author L. Harris Churchwell to autograph a copy of his second work, “Seeking Glory” at a book signing held at the Vienna Cotton Museum Thursday.

Local Sports
Online Extras
Opinion
Entertainment
Homepage
Business Marquee
Must Read
AP Video
Tributes Mark Boston Bombing Anniversary Raw: Kan. Shooting Suspect Faces Judge US Supports Ukraine's Efforts to Calm Tensions Suspect in Kansas Shootings Faces Murder Charges Ukraine: Military Recaptures Eastern Airport Raw: Storm Topples RVs Near Miss. Gulf Coast NASA Showcases Lunar Eclipse Pistorius Cries During Final Cross-Examination The Boston Marathon Bombing: One Year Later Michael Phelps Set to Come Out of Retirement First Women Move to Army Platoon Artillery Jobs Sex Offenders Charged in Serial Killings Police: Woman Stored Dead Babies in Garage OC Serial Murder Suspects May Have More Victims Family: 2 Shot in Head at Kan. Jewish Center Raw: Horse Jumping Inspires 'Bunny Hop' After Attack, Officials Kill 5 Bears in Florida Popular Science Honors Year's Top Inventions ND Oil Boom Attracting Drug Traffickers
House Ads
More
Weather Radar
Video Gallery
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Seasonal Content
Poll

Will you be following the Olympic Games?

A. Yes
B. No
C. Only some events
     View Results