ABpositive
Topic Author
Posts: 148
Joined: Mon Nov 07, 2005 2:36 pm

Profiteering From "taxes And Charges"

Fri Oct 13, 2006 10:14 am

I know that there are various fees and taxes associated with an airplane ticket (to cover for airport fees, government taxes, fuel surcharge, etc). Now that amount doesn't seem to vary regardless of how many passengers there are on the flight. When route gets up/down graded to a different sized aircraft the taxes don't change either. So what happens when the amount of those "taxes and charges" is less than what the airline collected from the passengers. Do they just pocket this? If so, how are the airlines regulated from profiteering from these "taxes and charges"?

Could someone enlighten me on how this system works

Many thanks,
ABpositive
 
aa757first
Posts: 3140
Joined: Sun Aug 03, 2003 11:40 am

RE: Profiteering From "taxes And Charges"

Fri Oct 13, 2006 10:15 am

Government taxes should be refunded. Fees imposed by the carrier may or may not be refunded. This is the way it works, AFAIK.

AAndrew
 
Matt D
Posts: 8907
Joined: Fri Nov 19, 1999 6:00 am

RE: Profiteering From "taxes And Charges"

Fri Oct 13, 2006 11:02 am

They're called "accessorial" charges. They are where the REAL money is at. No airline can make money selling tickets at posted prices. So they plump and push them up anywhere they can.

People are willing to pay $199 for a ticket +$75 in "fees, surcharges, and taxes".

People will be LESS LIKELY to purchase a ticket advertised at $274, even if it's all inclusive.

Yes, it's a money maker. But it's also about public perception. And most of all, it isn't at all limited to the airlines. The utility (check your monthly cell phone bill), trucking, car rental, cable, and other companies have been doing it for years.
 
aa757first
Posts: 3140
Joined: Sun Aug 03, 2003 11:40 am

RE: Profiteering From "taxes And Charges"

Fri Oct 13, 2006 11:05 am

Quoting Matt D (Reply 2):

People are willing to pay $199 for a ticket +$75 in "fees, surcharges, and taxes".

It's illegal for an airline to exclude fees imposed by them. For example, I can advertise a fare for $99 that doesn't include a $10 airport usage tax, but I cannot advertise a fare for $99 that doesn't include a $15 ground service charge that the airline has imposed.

AAndrew
 
Leskova
Posts: 5547
Joined: Wed Oct 08, 2003 3:39 pm

RE: Profiteering From "taxes And Charges"

Fri Oct 13, 2006 3:42 pm

The taxes/charges levied on tickets are, for the largest part, published independant of the aircraft size used on a flight. No refunds if the plane is smaller or cheaper (which doesn't necessarily have to be 'smaller', but could also be 'quieter'), just as there aren't any extra invoices to pay if your flight is operated by something larger/more expensive than originally planned.

The taxes/levies/charges that are dependant on things like weight are usually calculated into the fare by the airline, and will usually be calculated at a type of average accross the types of aircraft used on a flight.

If you can find a route operated by several different types of planes, take a look at the taxes/fees charged on the different types: usually, you'll find out that the taxes are identical, regardless if the flight is operated by a B737, an A320, a B777, an A330 or whatever else.

As for the side-thread about what has to be advertized - here in Germany you have to list the price that's printed at the bottom of the ticket in the add, i.e. fare plus taxes/charges levied on the ticket itself (which is why LH will constantly advertize €99 fares throughout Europe, though you've got 0 chance of actually buying it at that price: ticketing/service charges charged by the website/travel agency/airline go on top of that, but those, too, have to be mentioned in the add).
Smile - it confuses people!

Who is online