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Joined: Wed Feb 02, 2005 2:26 pm

Airline Taxes And Their Structures

Mon Mar 20, 2006 6:08 am

I don't know too much about this subject, but I've always found this interesting.

US carriers, (as I have noticed) charge higher fares than there counterpart european carriers, because the european carriers also have to account their higher taxes into the total cost of a fare. British Airways and Lufthansa have anywheres between 180-250 dollars in additional taxes whereas US carriers usually have to account for 100 dollars in taxes. I understand that tax structures are different in Europe and the US, but wouldn't this make the US airlines more competitive?

Secondly, there are airlines, for example - Air France, who have some entity set up in the US. For some reason, when booking in the US or on their US website or over the phone, the taxes are equivalent to the US carriers, even though it is a European carrier. Why is this? Is it because they share seats with Delta? Additionally NW and KLM code-share and have the strongest ties between two airlines; however, booking on the KLM site, you have to pay euro taxes, whereas the same flight by NW you get charged US taxes. I don't understand this, especially if AF has figured out a way to get around this, and KLM hasn't. Also, the fare between NW and KLM has to be the same on flights they share seats on, so many times the base fare of KLM flight is cheaper than the NW flight.... to make things more complicated, after finding the base fare on KLM, i would go to the NW site, and book by schedule and choose the KLM flights (blue logo even if operated by NW) and the original KLM fare appears (the one from the real KLM site), but since it's NW's website, I pay american taxes, but had i clicked the NW logo (even though same flight) I would pay the higher NW base fare.

Can anybody offer any explanations. Why doesn't BA and LH switch to AF's model? How come European carriers are more profitable than US carriers, but their earn less money on flights. Who has the market share on transatlantic flights? Is it a US or European airline? (Number of Seats/price/loadfactor)
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