Some flyers may not see savings from expired taxes

DALLAS (AP) — Some airline customers won't see savings this weekend even though several federal taxes on tickets have expired.

US Airways and American Airlines raised fares to offset the tax savings.

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

But other airlines left their prices unchanged on Saturday. Consumers could save money by shopping around.

The expired taxes can total $25 or more on a typical $300 round-trip ticket. For a September trip between Dallas and San Francisco, the cheapest American flight on Travelocity.com was $24 higher than offerings from United, Continental, Delta and Virgin America, which did not raise fares.

The taxes expired 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 they could 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.
Smith declined to say whether the increase would be rescinded if Congress revives the travel taxes.
Tom Parsons, who runs the Bestfares.com travel website, said consumers should get a break.

"Why would the airlines deserve it?" he said. "They already hit us with enough fees. Now they're keeping the government fees too."

The Transportation Department says it will lose $200 million a week. J.P. Morgan analyst Jamie Baker said airlines could take in an extra $25 million a day by raising fares during the tax holiday.

Parsons said competitive pressure eventually will force the airlines to match — either they'll all pass the tax savings on to passengers, or they'll all raise fares and keep the money themselves.

Spirit Airlines said Saturday that it is passing on to customers all of the savings, which it said could amount to more than $50 per round trip.

Southwest Airlines and its AirTran subsidiary raised prices by $8 per round trip, said spokeswoman Marilee McInnis.More...