The recent airfare hike that came in the wake of the partial Federal Aviation Administration (FAA) shutdown has not gone unnoticed by the government.
Due to the partial shutdown, the FAA is no longer able to collect federal ticket taxes from airfares. Instead of passing these savings along to the consumer, most of the major airlines––including Delta, American, United, US Airways, Southwest, and AirTran––have all raised fares to some degree to pocket the difference.
Democratic Senators Jay Rockefeller of West Virginia and Maria Cantwell of Washington released a letter on Tuesday addressed to Richard Anderson, the CEO of Delta and the chairman of the Air Transport Association (ATA), reprimanding the airline industry for raising fares during the tax holiday. Sen. Rockefeller is the Chairman of the Senate Committee on Commerce, Science and Transportation while Sen. Cantwell chairs its Subcommittee on Aviation Operations, Safety, and Security.
Rockefeller and Cantwell are asking industry officials to put their profits into an escrow account that they can then transfer to the Airport and Airway Trust Fund (AATF) when Congress reinstates the taxes. If the airlines are unwilling to create a trust the Senators argue that they should pass the tax savings along to the consumer.
This is not a purely partisan issue. Republican Representative John Mica of Florida advocated a similar plan when interviewed by CNN on Monday.
Collectively, the government estimates that airlines collect about $200 million a week in taxes and passing those savings along to the consumer would save $25 to $50 on a typical flight.
Rockefeller and Cantwell’s letter further suggests that the unauthorized collection of federal ticket taxes could have “long-term negative repercussions for the industry.” One fear is that air fares will rise again when the airlines are forced to pay back taxes on the fares collected during the shutdown.
The ATA has said that it is preparing a response to the Rockefeller and Cantwell letter. As of press time, their statement was not available.
By Lily J. Kosner for PeterGreenberg.com.
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