Travel Tips

Travel Tip: How Airline Tax Impacts Airfare

Tax signWe all talk a lot about airlines charging extra for services, but do you know how much of your ticket price goes toward airline tax and fees? The answer might surprise you. Right now, when you buy a plane ticket, you’re also paying government taxes and fees, airport charges, and surcharges imposed by the carriers themselves.

For example, the government collects a 7.5 percent tax on passenger fares. Other fees go toward the FAA, airport improvements and security. Say you’re buying a $300 domestic, round-trip ticket. More than $60 of that goes toward federal taxes alone.

Now the government is making moves to increase taxes and fees. Part of that includes doubling the security fee, and increasing fees for customs inspections and immigration services.

So is paying more money the answer to a better, safer flying experience?  Probably not.  According to a report from the independent Government Accountability Office, every dollar increase in the price of a ticket reduces travel demand by as much as 2 percent.
If those numbers actually played out, it would have a devastating impact on the industry.

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