Buy a plane ticket, and you'll pay the base fare plus the taxes and fees. Cancel that ticket at the last minute, though, and you won't always receive a refund for the taxes and fees.
Is that fair? You never flew, so you never used government or airport services. Why should you still pay taxes and fees for services you never used? Even if a ticket may be "nonrefundable" in exchange for being supercheap, why should the taxes and fees be "nonrefundable"?
The situation is different for retail goods. Let's say you buy a coat from a store as a gift, but your sweetheart doesn't like the coat. You return it within the grace period, and the store refunds the cost of your coat plus your taxes.
Not so with plane tickets. Cancel a flight, and you're usually out the taxes and fees.
"Congress or the FAA should end the practice of not refunding aviation ticket taxes on unused commercial airline tickets," says the National Business Travelers Association. The group has asked Congressman Bill Pascrell to have the Government Accountability Office investigate the auditing process of taxes on unused commercial airline tickets.
In case you think taxes and fees are small, think again. The effective tax rate is 16 percent of the average domestic fare. It's more for international flights.
Reader Cheryl is upset about taxes on plane tickets.
It used to be that when you saw the deal/sale emails from the airline, and you saw a price like "$160 round trip!", you knew that your ticket was going to cost right around that much.
Nowadays, you get an email that advertises a price such as "$59 each way!", as most airlines have realized the value of letting passengers pick their itinerary "a la carte". But instead of the fare adding up to around $120, there are so many taxes and fees tacked on AFTER you choose your flight times that the price of the ticket may be anywhere from 20% to 100% (or more) of the "bargain!" price.
Cheryl has the proof:
I went to two different airline sites, one a "major" airline, and one a "budget" airline, and put in the same itinerary for the same dates: Chicago O'Hare (ORD) round trip to Long Beach, CA (LGB) over the Memorial Day weekend.
The "major" airline charged a base price of $589 plus $42.80 in fees/taxes; the "budget" airline priced out at $285.61 plus $42.89 in fees/taxes. (Just one indication that it pays to shop around.)
List of "additional taxes and fees" for the "major" airline for domestic travel:
- September 11th Security Fee of $2.50 per U.S. enplanement
- Airport passenger facility charges (PFCs) of up to $18 roundtrip
- U.S. government excise tax* of $3.70 on each flight segment, defined as one takeoff and one landing
The "budget" airline listed their "taxes and fees" for domestic travel as:
- September 11 Security Fees of up to $5.00 each way
- Passenger Facility Charges of up to $9.00 each way
- U.S. excise tax of 7.5% based on the base fare;
- Federal Segment Tax of $3.70 per domestic segment. A segment is a takeoff and landing.
Sometimes the wording of the additional fees and taxes are a bit more vague and instead of seeing closely priced additional fees like the example given above, you may see differences of $20-80 or more between two airlines flying the same route.
In addition, for those travelers going overseas, whether it is as close as Canada or the Bahamas or even a U.S. territory like Puerto Rico, passengers are subject to an "international arrival/departure tax", "APHIS user fee" (??), "Immigration user fees", "Customs user fees", "Non-U.S. government taxes", as well as, depending on the country you are traveling to/from, you may be required to pay additional "Tourism tax" or "Tourism enhancement fees". (Last July 4th weekend, I went to the Bahamas, and the various "international travel" fees cost more than the base ticket price!)
Bad news for Cheryl. Travel taxes and fees are about to increase, according to the New York Times. "One proposal would raise the maximum passenger facility charge that airports can collect to $7 from the current $4.50 per flight segment. Another would increase the $2.50 federal security fee by $1 a flight in 2012.