Air ticket tax holiday: A few airlines pass along savings -- but for how long?

Los Angeles Times Staff Writer

Bucking the trend, a few airlines Saturday were still passing along the savings to customers after the federal government stopped collecting taxes on airline tickets. But many others raised fares to match the tax drop, which can amount to about $30 on a $300 fare, and a few that had held off on raising fares caved in.

The fast-moving developments happened after a divided Congress failed to extend laws that authorized the government to collect the airline ticket tax and other aviation-related taxes. So the laws, and the authority, expired at midnight Friday.

American Airlines, JetBlue Airways and Southwest Airlines were among many carriers that responded by raising fares. Net result: Their tickets cost the same, but the airlines pocketed more of the money.

As of Saturday night at least two carriers said they had not increased fares and were instead passing along the tax savings to their customers: Alaska Airlines and Virgin America.

“Our view is this is an exciting opportunity for travelers to get some savings as long as this tax holiday lasts,” Alaska Airlines’ Paul McElroy said.


Virgin America was even featuring the tax savings on its website, with the slogan: “Evade taxes. Take flight.”

Meanwhile, Delta Air Lines, Continental Airlines and United Airlines, which initially passed along the tax savings to their customers, had backed off and begun matching other carriers’ fare increases by Saturday night, their spokespeople said.

Marilee McInnis of Southwest Airlines said high fuel costs prompted Southwest to take advantage of the air ticket holiday to raise fares.

“We’ve had some astronomical gains in the cost of fuel this year,” she said. “This is basically to offset that.” She added that it was “a tough decision” to raise fares.

The potential tax savings include a 7.5% ticket tax; a separate tax of $3.70 per segment, or a takeoff and landing; and a $16.30 tax on international arrivals and departures, according to the Associated Press. McElroy of Alaska Airlines said passengers would also be spared an $8.20 departure tax for flights from Alaska and Hawaii to the the continental U.S.