Media demonizes airline industry

There's a news article at Yahoo Finance today... federal taxes on airline tickets - averaging $25 per ticket, have expired, because Congress didn't pass a measure to keep the FAA running.

This is what the author of the piece had to say:

DALLAS (AP) -- Airlines are tossing consumers aside and grabbing the benefit of lower federal taxes on travel tickets.

By Saturday night, nearly all the major U.S. airlines had raised fares to offset taxes that expired the night before.

That means instead of passing along the savings, the airlines are pocketing the money while customers pay the same amount as before.

American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue all raised fares, although details sometimes differed. Most of the increases were around 7.5 percent.

For consumers who wanted to shop around, only a few airlines were still passing the tax break on to passengers Saturday night, including Virgin America, Frontier Airlines and Alaska Airlines.

The expiring taxes can total $25 or more on a typical $300 round-trip ticket. They died after midnight Friday night when Congress failed to pass legislation to keep the Federal Aviation Administration running.

That gave airlines a choice: They could do nothing -- and pass the savings to customers -- or grab some of the money themselves.

"We adjusted prices so the bottom-line price of a ticket remains the same as it was before ... expiration of federal excise taxes," said American spokesman Tim Smith. US Airways spokesman John McDonald said much the same thing -- passengers will pay the same amount for a ticket as they did before the taxes expired.

Are airlines greedy bastards, or are they desperately trying to maximize their revenue. The cost of aviation fuel is exorbitant - you think gas prices for cars are out of site, avgas prices are much higher.

So they're trying to take advantage of a windfall which, properly managed, may give them breathing space without having to declare bankruptcy in the near future because htey already have their ticket costs pared to the bone.

There's another factor... well, I don't know if this is a factor or not, but how do the airline companies know that, when the guvmint gets its girdle in gear and gets those taxes reinstated, they aren't going to make them retroactive, so that the few airlines that dropped their prices won't immediately have to pony up the money that they didn't bother to collect in taxes?

I would still collect that money, and put it in the tax payment fund, just to be on the safe side.

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