Airlines faulted for keeping suspended tax

July 27, 2011 at 12:00 PM
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WASHINGTON, July 27 (UPI) -- Airlines should give passengers or the government millions of dollars that would have gone toward a suspended tax, congressional leaders say.

The airlines have not collected the passenger taxes since Saturday because Congress has yet to pass a bill to fund the Federal Aviation Administration, CNN reported Tuesday.

Most airlines raised their base ticket prices to at or near the amount they would be with the taxes included and kept the money that would have gone to cover the expired tax.

If it were given to passengers, it could save $25 to $50 on a typical flight and about $200 million a week total, the government said.

Republicans and Democrats alike criticized the airlines' move.

"As we have heard from airlines for many years, these fees, all of which are passed on to the consumer, depress the demand for air travel, hurting the industry's bottom line," Sens. Jay Rockefeller, D-W.Va., and Maria Cantwell, D-Wash., wrote in a letter to Delta Air Lines CEO Richard Anderson.

"We are left to conclude that your previous assertions were incorrect about the impact of taxes and fees on the industry," the lawmakers said in the letter to Anderson, also chairman of the board of the Air Transport Association, an industry group.

The two senators said the airlines should put the money into an escrow account and transfer it to the Airport and Airway Trust Fund when the tax is reinstated.

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