An air fare is advertised for $298. But when you pay for your ticket, you notice you’ve been charged $305. Another air fare is marketed at $500. But upon departure, you’re informed that another $12 is needed. Isolated incidents? Incorrect fare calculations?
Hardly. Airline fare surcharges represent one of the more insulting, insidious and often misleading aspects of travel.
These extra charges are now being placed on a variety of domestic and international flights. They are not always disclosed to passengers by the airlines or their travel agents, they often appear and disappear without notice, and they can add substantially to the cost of travel.
Consider these current charges that are included as part of your airline fare:
--8% federal excise tax.
--$6 international departure fee.
--$5 surcharge by certain U.S. airlines (Pan Am, American, TWA, United, Delta and Northwest) on their transatlantic routes to cover security costs.
--$2.50 fuel surcharge on most domestic flights originating in Boston.
--$5 fuel surcharge for flights from Chicago.
--$2 fuel surcharge for flights departing from Florida.
--$2.20 fuel add-on for flights leaving San Juan, Puerto Rico.
--$1 to $2 surcharge on most domestic flights leaving Denver to finance airport terminal improvements.
--$2 one-way security surcharge for flights heading towards the Bahamas or Bermuda.
In addition, foreign passengers coming into the United States from countries other than Canada, Mexico and the Caribbean are assessed a $5 U.S. Customs fee.
Most passengers never know about these surcharges before they make their ticket purchases. And many travelers only discover the excess fees after they’ve completed their journey.
Both passengers and travel agents aren’t thrilled about the additional charges.
“It sometimes puts us in a bad position,” says Annette Alvarez, director of sales and marketing for the Travel Store, a Los Angeles travel agency, “because we have to explain extra charges that we had nothing to do with.
“These surcharges may not be that big, but they do have an effect on the leisure traveler, who feels that he or she is being abused. If they’re going to add these charges, why not throw in a free headset or drink as compensation?”
“Because it is not a prudent business decision to do so,” says one airline spokesman. “We are adding the surcharges because they are costs assessed against us that we didn’t plan on when we established our fare structures. We need to find a way to recover these costs.”
Unfortunately, the surcharges keep coming.
At this writing, there are a number of newly proposed surcharges that only promise to make air travel even more expensive:
--A $1 to $3 U.S. Department of Agriculture inspection charge for passengers coming into the United States.
--A $1 charge (called a “ticket-writing fee”) to fund the U.S. Travel and Tourism Administration.
--A $1, $2 or $3 Passenger Facilities Charge, to fund expansion and renovation at U.S. airports.
--An increase in the current federal excise tax on domestic tickets, from 8% to 10%.
The proposed excise tax increase has drawn the most fire.
“That represents a 25% tax increase,” says Drew Steketee, executive director of the Partnership for Improved Air Travel, “and we think that’s excessive and unnecessary.”
Since 1988, the partnership (funded by 14 airlines and 19 manufacturers) has been fighting the management of the Aviation Trust Fund (where the excise tax dollars rest), claiming that the fund has a substantial surplus and is not used fully to improve the U.S. air travel system.
Under the law that established the fund, the 8% tax currently included as part of your domestic air fare pays for 100% of new air-traffic control systems, a substantial portion of airport capacity improvements, and a partial funding of the Federal Aviation Administration.
Each year, passengers pay a federal excise tax of 8% on all domestic airline tickets. That tax generates $4 billion in revenues. (Since 1982, more than $31 billion has been raised for the Aviation Trust Fund. Currently, the fund has a balance of $14 billion, of which only half has been earmarked for aviation project spending.)
That leaves a surplus of $7 billion. “With that kind of surplus,” Steketee argues, “you’ve got to ask what do they want the additional money for? Historically, this fund has a track record that stinks, and most consumers have difficulty understanding the need for more funds when current funds aren’t being committed.”
In June, the partnership generated 10,000 letters from its membership to Congress opposing the new tax.
Also pending before Congress is a bill that would create a Passenger Facility Charge, or PFC. It would allow a charge of $1, $2 or $3--depending on the size and operating costs of an airport--to passengers for using that particular airport. The charge would be collected as part of the airline ticket price.
But the PFC legislation, if passed, might cost passengers far more than $3. For example, a passenger flying round trip between Los Angeles and New York who changes planes at a hub airport en route in each direction could pay a PFC as high as $12.
The legislation has passed the House and is being considered in the Senate.
In the past, some airlines have announced their own surcharges as a means of opposing local plans that would drive up their costs.
In 1986, after Las Vegas officials announced the expansion of an airport terminal, American Airlines argued--unsuccessfully--that the plans were too costly and that they would substantially increase the rent for terminal space that American paid in Las Vegas.
When McCarran Airport officials seemed to ignore American’s protests, the airline announced that it was imposing a $7.50 per-passenger surcharge on Las Vegas flights to help cover the airline’s higher costs.
“Soon thereafter,” reports one airline source, “the authorities reached an agreement with the airline, and the surcharge was dropped.”
American has since announced other surcharges, which were also dropped when no other competing carriers went along with the increases.
A few months ago, the Port Authority of New York (which operates both J.F.K. and La Guardia airports) informed a number of airlines using La Guardia that it would be installing imported granite floors in many of the terminal areas, which would result in higher user costs to the airlines.
Immediately, American and United protested vigorously. “It was not only an excessive charge,” says American spokesman Al Becker, “it was unrealistic. Who needs imported granite? It’s not as durable as the high-strength tile we were already using in other areas of the terminal. But they were requiring us to do it.”
American says it was also being hit with similarly excessive charges at four other airports. “We saw no other way to recover our costs,” says Becker, “than to announce a surcharge.”
In early July, American announced a $1 to $4 “excess facilities” surcharge on departures and arrivals that were due to take effect last week at La Guardia, Newark, New Orleans, West Palm Beach and Ft. Myers, Fla.
But when no other airline moved to match the surcharges, American quickly dropped them.
The next time you make an airline reservation, double-check that the price quoted in advertisements is the actual price you will pay. If it is not, demand to know if there is a surcharge being added and, if so, the reason for the surcharge.
If enough passengers complain--to the airlines, to their travel agents and to their legislators--there’s a reasonably good chance that these annoying, and expensive, add-ons can be curtailed . . . or at least controlled.