PG: The little-known story is not just how much money the airlines are generating with fees, it’s the tax structure. Airlines tickets have been notoriously heavily taxed by federal governments and state governments. In some cases, the taxes are more expensive than the actual airline fare.

Ancillary fees don’t fall under the ticket tax. Instead, they come under regular sales taxes and the airlines don’t have to pay as much money

HM: Exactly! It’s a 7.5 percent tax that the airlines pay on the basic fare transporting people. They don’t pay that tax on fees they collect so that’s a big advantage for the airlines.

PG: Let’s not forget fuel surcharges. Here’s where it gets a little dicey. The good news is that fuel costs this summer did not skyrocket–they were on par with last year. However, the airlines are continuing to charge fuel surcharges.

HM: Fuel surcharges have been going up almost twice as fast as actual fuel prices. I recently reported that for the past couple of years no airline has dropped their fuel surcharges even when fuel prices went down.

PG: This brings to mind what happened a couple of years ago when hotels were charging energy surcharges for their electrical bills. We did a study and found out that some hotels that were charging energy surcharges to states that didn’t have them. Next thing you know the attorney generals of a number of states went after these hotels and made them rebate it. If fuel isn’t going up, but fuel surcharges are, “Attention Attorneys: I’m smelling class action here!”

HM: It goes to the point that they’re not charging these fuel surcharges because of the fuel costs—there are other marketing reasons that they’re using them for.

PG: Is truth in pricing is on vacation?

HM: It’s all “buyer beware.” The Department of Transportation has adopted a lot laws to try to make it easier, but there are still some loopholes out there. The airlines can still sneak charges on you, so you have to do your homework and check out all of the hidden fees in the fine print.

How do you feel flying this fee-heavy market place? Sound off in the comments below.

For further information on airline fees, check out:

• Land of the Brave and Home of the Fee: Airline CEOS Speak out at GBTA Conference
• The Travel Detective on Spirit Air’s Ancillary Fee Madness
• Ancillary Fees, Anti Trust & Credit Card Hacking in Hotels
• The 2011 Report: Airlines Make 1.5 Billion from Travelers in Extra Fee Charges
  

By Peter Greenberg for Peter Greenberg Worldwide

Feature Image Credit: BigStock