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Mir
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RE: Airlines May Soon Advertise Fares Without Taxes

Sat Apr 19, 2014 4:13 pm

Quoting Pyrex (Reply 113):
This thread has somehow derived into a discussion on the merits of the way prices are displayed in the U.S., what I said might be less relevant for airline tickets but is definitely relevant for that.

If Subway wants to do a national ad for $5 footlongs, just say "$5 plus local taxes" in the ad. And then when people go into the store, on the menu board it says $5.68 or $5.82 or whatever the case may be. Simple and honest.

-Mir
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flyingturtle
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RE: Airlines May Soon Advertise Fares Without Taxes

Sat Apr 19, 2014 4:25 pm

Quoting jerseyguy (Reply 149):
They are not lying to you about the price. They are charging you $5 for the the product, the extra $.35 is a transaction with the government

But to use that product, you have to pay the extra 35 cents. Otherwise you cannot. IMHO you were totally right if it was up to the passenger to pay the taxes and fees directly, by booking his share of the landing fee at the airport's website.

I can't see how an airline would profit from hiding the taxes and fees. I favor airlines that make it easy for me to figure out the total trip costs.


David

[Edited 2014-04-19 09:28:07]
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rutankrd
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RE: Airlines May Soon Advertise Fares Without Taxes

Sat Apr 19, 2014 4:45 pm

Quoting jerseyguy (Reply 149):
They are charging you $5 for the product, the extra $.35 is a transaction with the government thart they are required to be the agent for, they see not a penny of that money (I don't even think they get any money for the cost to them to collect sales tax, I could be wrong

Businesses usually bank the sale taxes and gain potential interest and short term cash-flow benefit for a period of time- Depending on domain could be anything up to a year !

Normally sale taxes such VAT GST are also recoverable on commercial business invoices.

Only the final consumer actually pays !

Certainly case in EU.

When I buy product wholesale the VAT element is stated on the invoice receipt . As VAT registered business If i then incorporate that product or service and resell it - I book the tax paid as an expense and claim it back at the end of the quarter. That includes the VAT paid on fuel for company run vehicles.
 
evomutant
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RE: Airlines May Soon Advertise Fares Without Taxes

Sat Apr 19, 2014 4:50 pm

The arrogance of some posters who seem to think that us poor oppressed Europeans are incapable of understanding how much tax we pay is staggering.
 
ODwyerPW
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RE: Airlines May Soon Advertise Fares Without Taxes

Sat Apr 19, 2014 5:08 pm

Personally,
when I see a Price.. that is what I expect to pay...

I don't want to click on a $199 fare, only to find it's really costing me $320 after the fuel surcharges, landing fees, homeland secuirty fees, taxes, baggage fees, etc... are added.

Give the Overall Price... and then provide a breakdown of the components.

Why?

Because Airlines Tickets are expensive.... When a couples/families travel, they are paying the equivalent of a month's mortgage or more. And the added fees/taxes are substantial.
Advertised prices should reflect the MONEY that is actually required to exchange hands... anything else is disingenous.

In Mexico... everything has IVA (fed sales tax) included..... EXCEPT Airfare...
So I click on a flight for $2999 mexican pesos (about $250)...
and it ends up costing me over $5000 mexican pesos by the time the fees/taxes are included. Very annoying and misleading.
One of the most expensive things a Mexican routinely purchases is Airfare... and it's true cost is hidden.
learning never stops.
 
Mir
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RE: Airlines May Soon Advertise Fares Without Taxes

Sat Apr 19, 2014 5:15 pm

Quoting flyingturtle (Reply 151):
I can't see how an airline would profit from hiding the taxes and fees.

Simple: it gets more people to book tickets with them if they can advertise a low fare but hide taxes and fees until the customer is well along with the purchase process. If taxes and fees are hidden (i.e. not displayed up front), then in order to do a proper comparison a prospective customer has to select the fare they want, go through the process of selecting flights, seats, etc., then see what the total price is, and then repeat the whole process with any other airlines they're considering. That can be a lengthy process, and so the average customer will just book with the cheapest carrier and accept the taxes for what they are. Thus, carriers that thrive on low fares and then selling extras benefit significantly, which is why you saw Spirit put up so much fuss about not being allowed to do it.

-Mir
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Pyrex
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RE: Airlines May Soon Advertise Fares Without Taxes

Sat Apr 19, 2014 5:25 pm

Quoting RWA380 (Reply 138):
and New Hampshire I imagine may be a nice place to visit, but I do not know for sure, maybe someone more knowledgeable could help you with that info.

New Hampshire is a great state, out of the ~30 states I have visited in the U.S. it is one of my favorite ones. Beautiful landscape, nice towns, rugged people, low taxes. Plus, you have Boston nearby if you are ever in the mood to get taxed up the wazoo. A little libertarian enclave in a sea of big government types all around them. "Live Free or Die". A bit too cold in winter, though. Had to go twice to Hanover this January, during the middle of polar vortexes, and it was not pleasant...

Quoting jetblastdubai (Reply 145):
I did find it interesting that someone brought up the fact that in the US, taxes are also included in auto/truck fuel prices on the pump instead of being listed separately or added at check out. Air travel and fuel are two commodities that are taxed at much higher rates than normal consumer goods. My guess is the government agencies that benefit from these additional taxes probably don't want to make it too convenient for consumers to see how much they're paying above and beyond the actual cost of the good or service.

That is precisely the case. The reason governments do no want you to see the actual price the merchant gets have absolutely nothing to do with "consumer protection",

Quoting Mir (Reply 150):
If Subway wants to do a national ad for $5 footlongs, just say "$5 plus local taxes" in the ad. And then when people go into the store, on the menu board it says $5.68 or $5.82 or whatever the case may be. Simple and honest.

I am sure that is a jingle that will roll off the tongue. "$5 plus local sales taxes footlong".
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flyingturtle
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RE: Airlines May Soon Advertise Fares Without Taxes

Sat Apr 19, 2014 5:27 pm

Quoting Mir (Reply 155):

Thank you for the lengthy response!

I missed your point - I don't fly often, and I'm accustomed to a tiny selection of carriers (U2, not much else...) and after reading the various surcharges, I would say "dang" and look into railroad or bus.


David
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Jerseyguy
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RE: Airlines May Soon Advertise Fares Without Taxes

Sat Apr 19, 2014 6:05 pm

Quoting evomutant (Reply 153):
The arrogance of some posters who seem to think that us poor oppressed Europeans are incapable of understanding how much tax we pay is staggering.

Maybe its a cultural thing, the idea of paying so much in taxes is crazy to us in the US. So if you truly knew how could you put up with it.
 
JoeCanuck
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RE: Airlines May Soon Advertise Fares Without Taxes

Sat Apr 19, 2014 6:22 pm

Airfares can't be treated like prices for regular consumer goods because they are not like regular consumer goods. In fact, the current regulations come closer to that ideal than the old system. The old system is more like buying used cars than retail goods....all you know about what you will pay going in is that it won't be the advertised price.

When you buy a t-shirt or tank of gasoline, all of the fees, costs and expenses the seller pays are included in the advertised price. Consumers don't get the retailer expense breakdown because they just don't care. The only, at checkout add on, is sales tax. If airlines are so darned concerned that passengers know the tax/airline breakdown of the total cost, they can break it down at any point in the purchase process.

All they want to do is the old bait and switch sales technique, which is considered deceptive in any other retail industry, yet has been allowed for decades in the airline industry...until recently.

Going back to the old system is only good for airline advertisements....not consumers.
What the...?
 
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seabosdca
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RE: Airlines May Soon Advertise Fares Without Taxes

Sat Apr 19, 2014 8:21 pm

Quoting 737tdi (Reply 140):
NO retail business in the USA shows sales tax on their products, with few exceptions. Very few exceptions. Why should an airline be any different?

As I keep saying (apparently into the wind), this is not just about taxes, but also about airline fees.

Quoting Mir (Reply 147):
And they do. I just looked for a ticket on Delta - the total price (in this case $240) is shown when you select your flights, and then on the very next page it says:

Price per passenger: $202.80

Taxes, fees and charges: $37.20

Total per passenger: $240.00

So it's very clear what the actual fare is and what's taxes.

Are you sure that all those "taxes, fees, and charges" are government fees? Some might be airline fees. (Not sure about this particular example.)

Quoting JoeCanuck (Reply 159):
All they want to do is the old bait and switch sales technique, which is considered deceptive in any other retail industry, yet has been allowed for decades in the airline industry...until recently.

  

This is a way to advertise meaningless prices, nothing more, nothing less.
 
JoeCanuck
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RE: Airlines May Soon Advertise Fares Without Taxes

Sun Apr 20, 2014 4:42 am

When you buy booze or cigs or gas at the pumps, (all heavily taxed items), you buy them at the advertised price...plus sales tax. Do consumers care about all of the expenses incurred in whatever processes happened to bring that item to them? No....no they don't. All they care about is what comes out of their wallet.

This espcially goes for shopping around...people don't want to have to go through an entire purchase process once just to get a price....much less multiple times if you're doing comparison shopping.

Yes, there are other fees unknown at time of purchase like airport fees...but these will be the same for any flight from that airport so direct comparisons can still be made.

There will always be exceptions but what consumers really don't want is to be surprised by a radically higher price than advertised.
What the...?
 
Mir
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RE: Airlines May Soon Advertise Fares Without Taxes

Sun Apr 20, 2014 5:10 am

Quoting Pyrex (Reply 156):
I am sure that is a jingle that will roll off the tongue. "$5 plus local sales taxes footlong".

So you have a little thing at the end that says "price does not include local taxes", or put it in fine print at the bottom of the screen. Lots of ways to make it work. What's important is that when someone actually walks into a store to get a sandwich, they can see on the menu how much money they're going to have to pay for it.

Quoting seabosdca (Reply 160):
Are you sure that all those "taxes, fees, and charges" are government fees? Some might be airline fees.

Some might be, but that's a separate issue. My point there was that airlines already can, and do, show customers the breakdown of their fares, so the argument that taxes aren't transparent enough doesn't really fly.

As for airline fees, whether or not airlines are allowed to take taxes out of their advertised fares, things like fuel surcharges that the customer has no way of avoiding should not be allowed to be included in with government fees, and they shouldn't be allowed to be broken out of the fare in the first place.

-Mir
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seabosdca
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RE: Airlines May Soon Advertise Fares Without Taxes

Sun Apr 20, 2014 5:30 am

Quoting Mir (Reply 162):
As for airline fees, whether or not airlines are allowed to take taxes out of their advertised fares, things like fuel surcharges that the customer has no way of avoiding should not be allowed to be included in with government fees, and they shouldn't be allowed to be broken out of the fare in the first place.

   And that's my biggest (although not my only) concern with this legislation. I don't feel the language is clear enough to ensure that airline fees are included in the advertised base fare. And I don't think that's because the writers were incompetent.

(Although, as a consumer, I'd also vastly rather have taxes included in the first number I see when I'm comparing itineraries.)

[Edited 2014-04-19 22:31:44]
 
RussianJet
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RE: Airlines May Soon Advertise Fares Without Taxes

Sun Apr 20, 2014 6:52 am

Quoting jerseyguy (Reply 158):
So if you truly knew how could you put up with it.

We can already very easily see how much tax we pay. That information is easily found. We also have the convenience of being able to immediately compare overall prices and know instantly what the product will actually cost me though, rather than seeing a meaningless headline figure that doesn't reflect the reality of any resulting purchase. Where's the disadvantage for the consumer being able to immediately accurately compare costs at a glance? If all airlines are subject to the same burdens and obligations, what's the problem with including them in the headline price?
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hOMSaR
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RE: Airlines May Soon Advertise Fares Without Taxes

Sun Apr 20, 2014 7:19 pm

Quoting Pyrex (Reply 156):
The reason governments do no want you to see the actual price the merchant gets have absolutely nothing to do with "consumer protection",

Again, this has nothing to do with anything. How much of the ticket price the airline gets to keep is already clearly shown. Every airline website I've checked in the US shows the breakdown of fare vs taxes/fees, so to say that the government doesn't want you to see the actual price the merchant gets to keep is patently false. It's already visible today.

The reason airlines are pushing this has absolutely nothing to do with letting passengers know how much of the fare the airlines get to keep (which is something that probably less than 1% of passengers actually care about). It has everything to do with trying to get more business by advertising prices lower than people will actually wind up paying, and making comparison shopping more difficult, as numerous others have already pointed out.
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adamh8297
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RE: Airlines May Soon Advertise Fares Without Taxes

Sun Apr 20, 2014 7:50 pm

Quoting homsar (Reply 165):
The reason airlines are pushing this has absolutely nothing to do with letting passengers know how much of the fare the airlines get to keep (which is something that probably less than 1% of passengers actually care about). It has everything to do with trying to get more business by advertising prices lower than people will actually wind up paying, and making comparison shopping more difficult, as numerous others have already pointed out.

That will not affect me since I screen all prospective flights with matrix.itasoftware.com.
Airlines flown: A3, AA, AC, AF, AM, BA, B6, CA, CO, CX, DL, EA, EL, IB, LH, MI, MQ, NH, NW, NZ, OU, PE, QF, S4, SQ, TP, UA, US, VS, WE, WN
 
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lightsaber
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RE: Airlines May Soon Advertise Fares Without Taxes

Sun Apr 20, 2014 11:44 pm

Quoting Pyrex (Reply 113):
Closer to triple, actually, but yes, your point is valid.

When one understates a point and its still valid...     

Quoting PITingres (Reply 108):
I have no problem with this, indeed I'd be 100% behind it. Unless the new law requires simultaneous display of fare, tax, and total fare, though, that's not how it will be used. Notice how the proposal says:

Perhaps I'm not worried as Orbitz does a great job of sorting the true costs and I *always* double check fares on that site.  
Quoting adamh8297 (Reply 166):
That will not affect me since I screen all prospective flights with

Nice link. No better than Orbitz but it did provide a few more options. I will check it in the future.


Lightsaber
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offloaded
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 1:07 pm

We have long since ceased quoting fares without taxes. What's the point? I can't sell you the fares with taxes.

3 quotes I sent out today:

BA to LON:
FARE TAXES TOTAL
209.00 103.29 312.29

AB to PMI:
FARE TAXES TOTAL
3.00 120.23 123.23

EK to CPT
FARE TAXES TOTAL
470.00 389.02 859.02

"Taxes" though in our market include the fuel surcharge, which I think should be banned. The "fuel surcharge" was supposed to be a temporary measure, but is now over a decade old. Take that AB one above. The "fare" is 2.4% of the total cost. It's a crock.
To no one will we sell, or deny, or delay, right or justice - Magna Carta, 1215
 
danman132x
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 1:34 pm

This is a bad idea. All I know is that I don't care how much of the fare is taxes, and how much the airline gets. I want to see the full and final price when browsing for tickets. On another note, taxes are way too high.

Recent ticket I just bought to Europe for this summer...
FARE: 760.00 USD
Taxes/Carrier-imposed Fees: 638.70
Ticket Amount: 1398.70 USD

Almost half of it is taxes. I have the full breakdown in my bill.
 
Mir
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 1:59 pm

Quoting danman132x (Reply 169):
On another note, taxes are way too high.

Recent ticket I just bought to Europe for this summer...
FARE: 760.00 USD
Taxes/Carrier-imposed Fees: 638.70
Ticket Amount: 1398.70 USD

Almost half of it is taxes. I have the full breakdown in my bill.

But how much of those "taxes/carrier-imposed fees" are actually taxes?

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
danman132x
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 2:32 pm

Quoting Mir (Reply 170):
But how much of those "taxes/carrier-imposed fees" are actually taxes?

This is what I pulled up real quick:
Detailed Tax Information
AY 7.50
CJ 19.80
LU 5.20
RN 18.60
US 35.00
VV 5.60
XA 5.00
XF 13.50
XY 7.00
YC 5.50
YR 516.00
Total: 638.70

The printed paper is at the house with what all the codes mean. YR is the fuel I just checked which is pretty steep.

[Edited 2014-04-21 07:35:22]
 
AT
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 2:35 pm

What matters to the passenger purchasing the ticket is the total cost she or he will be paying- the breakdown is really irrelevant. So I don't really see why this should be an issue at all.

It's different with things like baggage or premium seating fees because those are optional addons. But the tax is not something one can choose to pay or not pay. thus it is inseparable from the total fare.
 
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seabosdca
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 2:51 pm

Quoting danman132x (Reply 171):
YR is the fuel I just checked which is pretty steep.

And not a tax. The carrier keeps that money. Including it in the "taxes" listing is pure deception.
 
DLD9S
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 3:00 pm

Quoting danman132x (Reply 169):
Recent ticket I just bought to Europe for this summer...
FARE: 760.00 USD
Taxes/Carrier-imposed Fees: 638.70
Ticket Amount: 1398.70 USD
Quoting danman132x (Reply 171):
This is what I pulled up real quick:
Detailed Tax Information
AY 7.50
CJ 19.80
LU 5.20
RN 18.60
US 35.00
VV 5.60
XA 5.00
XF 13.50
XY 7.00
YC 5.50
YR 516.00
Total: 638.70

So $35 of your $1400 ticket are U.S. sales tax. $13.50 go to the airports as PFCs. Then there is a small chunk that covers U.S. customs and immigration agencies (XY, XA, YC). Another small chunk goes to the countries you visit (I think RN is Dutch?)... the airline keeps the $516.
717 727 737 747 757 767 777 DC9 DC10 M80 M90 M11 L10 AB6 333 340 319 320 321 ARJ CRJ EM2 EMJ SF3 146 100 BE1...
 
offloaded
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 3:12 pm

Quoting seabosdca (Reply 173):

   I would've thought that's just the kind of thing the DoJ and/or European Commission love to hand out massive fines over.
To no one will we sell, or deny, or delay, right or justice - Magna Carta, 1215
 
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flyingturtle
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 3:44 pm

Quoting danman132x (Reply 171):
YR 516.00
Total: 638.70

The printed paper is at the house with what all the codes mean. YR is the fuel I just checked which is pretty steep.

OMG. I think there is a conspiracy there! The airline does not want the public to know how expensive the fuel is! They don't want to know how much transporting a person from A to B actually costs! 


David
Reading accident reports is what calms me down
 
toxtethogrady
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 3:54 pm

WTF? Whatever happened to so-called truth in advertising? It's bad enough when they don't tell you that the European airfare is close to double the listed price. Enough already; airfares need to include tax to be accurate.
 
AT
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 4:33 pm

Quoting mercure1 (Reply 2):
So if Spirit Airlines want to advertise a $9 ticket, they should do so, not have to say its a $36 ticket today due to all the fees and taxes involved.

The problem is that the ticket still costs $36. Not $9.

How about listing the total, and then including a 'view fare breakdown' icon next to it . I bet 90% of passengers, if not more, will never click on the link. Because they don't care.

While I see the airline point of view, this cannot be good for the consumer in the long-run from any angle.
 
toxtethogrady
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 5:23 pm

Quoting mercure1 (Reply 2):
So if Spirit Airlines want to advertise a $9 ticket, they should do so, not have to say its a $36 ticket today due to all the fees and taxes involved.

That is deceptive bordering on fraud. So when the passenger shows up to purchase a $9 ticket, they get told, "Yes, but then the additional tax makes it $36. And you can bring your carry-on for another $25. And the window seat, which costs another $25, is all we have left. And we've got a fuel surcharge of $10. And we'll sell you a box lunch for another $15."

The only thing worse than this is the tire shop that offers tires for your car for $55, but if you want them installed on your car, there's an additional service charge of $35, plus a disposal fee of $5 and the mandatory tire balancing for another $10 and replacement tire sensors for another $5. So the $55 tire actually costs $110. That's criminal.
 
Viscount724
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 5:39 pm

Quoting seabosdca (Reply 173):
Quoting danman132x (Reply 171):
YR is the fuel I just checked which is pretty steep.

And not a tax. The carrier keeps that money. Including it in the "taxes" listing is pure deception.

As long as the total price has to be quoted, it's not deception. It would only be deception of the carrier quoted the fare in isolation and you only saw the fuel surcharge (often much more than the "fare") at a later stage.

Provided I only see the total amount including taxes, fuel surcharges etc. (except for optional charges like checked baggage fees etc.) I don't care what the individual charges are. Like most people, I only care about the final amount I'm going to pay when comparing prices before booking.
 
AT
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 5:40 pm

Quoting toxtethogrady (Reply 179):
That is deceptive bordering on fraud. So when the passenger shows up to purchase a $9 ticket, they get told, "Yes, but then the additional tax makes it $36. And you can bring your carry-on for another $25. And the window seat, which costs another $25, is all we have left. And we've got a fuel surcharge of $10. And we'll sell you a box lunch for another $15."

The only thing worse than this is the tire shop that offers tires for your car for $55, but if you want them installed on your car, there's an additional service charge of $35, plus a disposal fee of $5 and the mandatory tire balancing for another $10 and replacement tire sensors for another $5. So the $55 tire actually costs $110. That's criminal.

For the other examples you cite - extra charges for window seats, and lunch boxes- the airline can at least make a semi-valid point that those charges are optional You CAN fly without having to pay those. But you can't buy a ticket without paying the tax on it.

I'm curious what transpired or led to the proposal for such a bill.
 
Mir
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 7:11 pm

Quoting Viscount724 (Reply 180):
As long as the total price has to be quoted, it's not deception.

It absolutely is deception from the standpoint of allowing passengers to know how much they're paying in taxes. I get the idea that passengers should see how much of their money the government is taking, but if airlines are going to hide fuel surcharges in among the taxes then that defeats the whole purpose of breaking the taxes out - $638 in tax on a $760 ticket (for a total of $1400) would lead one to believe that the taxes are way too high and that the government is robbing them, when in fact the taxes are really only $120, which is much more reasonable - the airline is pocketing the rest of the money.

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
Viscount724
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 7:20 pm

Quoting Mir (Reply 182):
Quoting Viscount724 (Reply 180):
As long as the total price has to be quoted, it's not deception.

It absolutely is deception from the standpoint of allowing passengers to know how much they're paying in taxes. I get the idea that passengers should see how much of their money the government is taking, but if airlines are going to hide fuel surcharges in among the taxes

What airlines are specifically referring to a fuel surcharge in the fare breakdown as a "tax"? IATA assigns 2-letter codes for things like fuel surcharges but they shouldn't be called a "tax".
 
D L X
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 7:27 pm

Quoting seabosdca (Reply 16):
In other words, publicity for the airlines' political agenda is more important than clarity for consumers.

To be fair, that has ALWAYS been the American style of price advertising. When you go to the grocery store and buy a bunch of bananas for $1, and the store charges you $1.05, you know exactly how much the government is upcharging. When you buy plane tickets, you don't. If that $1 banana bunch changed to $1.80, people would revolt until it came back down to $1.05. I like the idea - it encourages lower taxes because consumers will be outwardly aware of how much the government is tacking on to the fare.


Now, if consumers are confused because they can't add, that's on the consumers. And I have little sympathy for them.
 
Scorpio
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 7:42 pm

Quoting D L X (Reply 184):
To be fair, that has ALWAYS been the American style of price advertising. When you go to the grocery store and buy a bunch of bananas for $1, and the store charges you $1.05, you know exactly how much the government is upcharging. When you buy plane tickets, you don't. If that $1 banana bunch changed to $1.80, people would revolt until it came back down to $1.05. I like the idea - it encourages lower taxes because consumers will be outwardly aware of how much the government is tacking on to the fare.


Now, if consumers are confused because they can't add, that's on the consumers. And I have little sympathy for them.

Argument has been made before, and has been shot down by about 90% of the posters here: not being able to see the actual price you're going to pay before getting to the checkout is annoying. When airlines are allowed to do it, it'll make it much more difficult for customers to make comparisons between airlines. Which is exactly what the airlines want, NOT what the customers want (as can very clearly be seen from the reactions here). And as has also beeen said multiple times before: anyone who wants to know how much of the ticket price is taxes can easily do so: it's clearly indicated both on the website while you're booking, and on your receipt when you've booked. So there really is no reason at all why airlines should be allowed to advertise prices without taxes, other than the reason why they want it: so they can lure passengers to their site with very low prices that are nowhere near what they'll actually pay, and that make it more difficult for people to compare. Neither of which are in the consumers' best interests.
 
D L X
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 7:48 pm

Quoting Scorpio (Reply 185):
Argument has been made before, and has been shot down by about 90% of the posters here

The loudest voices are not necessarily the most correct ones. With that said, it is a FACT that in the US, prices for most goods and services are advertised without tax. I recognize that the US is an outlier compared to the rest of the world, but the airline industry has been an outlier in comparison to the rest of the US. You can't really disagree with that.

Now, it is my OPINION that this is a good thing. Taxes have grown pretty crazy (especially in Europe!!!) and I think a large reason for that is the obscuration of those taxes.
 
usairways85
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 7:53 pm

I find it rather nice that when I look for airfare the price I initially see is the actual price and I don't have to go all the way to the final screen for the taxes & fees to be added.

If you think there is going to be some crack down on taxes & fees then ok pull them back out otherwise it is just a nuisance to initially see a $400 JFK-LHR fare that does not become $900 until you are at the final purchase screen.
 
D L X
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 8:00 pm

Quoting usairways85 (Reply 187):
If you think there is going to be some crack down on taxes & fees then ok pull them back out otherwise it is just a nuisance to initially see a $400 JFK-LHR fare that does not become $900 until you are at the final purchase screen.

I agree that would be a nuisance. It is obviously already well known to a not-so-small number of us that the taxes are getting absurd. (I recently booked a flight to Europe, and the fees actually doubled the fare.) But I still think it would have an effect because it would grow the number of people who are aware and upset that the taxes and fees are so high. People would be pissed off, either at the gov or at the airlines, or both. But it would cause change.
 
Scorpio
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 8:01 pm

Quoting D L X (Reply 186):
The loudest voices are not necessarily the most correct ones. With that said, it is a FACT that in the US, prices for most goods and services are advertised without tax. I recognize that the US is an outlier compared to the rest of the world, but the airline industry has been an outlier in comparison to the rest of the US. You can't really disagree with that.

Now, it is my OPINION that this is a good thing. Taxes have grown pretty crazy (especially in Europe!!!) and I think a large reason for that is the obscuration of those taxes.

In this case, the loudest voices here have been the few people defending this measure. So you're right, the loudest voices aren't always the most correct ones. And yes, prices in the US are typically listed without taxes. Ask foreigners who come to the US what they think about that. Nine out of ten will call it one of the most annoying things about visiting the US. Several people have said it here. And as I've said before: I've never heard a single American coming to Europe complain about our advertised prices being the actual price they're paying at checkout. I repeat once more: that makes it very clear to me which is the superior system...

Also, you're not the first one to bring up this supposed 'obscuration' of taxes. But as said before, the idea that advertising proces with taxes included is some obscure government ploy to be able to raise taxes 'without anyone noticing' is silly at best. As said before, whenever there's even a proposal to change anything about any taks, sales taks or otherwise, it's headline news here everywhere. Trust me, we know. And we don't need a lesson in it every time we buy a candy bar to know or remember...
 
YoungDon
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Joined: Thu May 31, 2001 9:33 am

RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 8:07 pm

Quoting Mir (Reply 182):
It absolutely is deception from the standpoint of allowing passengers to know how much they're paying in taxes. I get the idea that passengers should see how much of their money the government is taking, but if airlines are going to hide fuel surcharges in among the taxes then that defeats the whole purpose of breaking the taxes out - $638 in tax on a $760 ticket (for a total of $1400) would lead one to believe that the taxes are way too high and that the government is robbing them, when in fact the taxes are really only $120, which is much more reasonable - the airline is pocketing the rest of the money.

-Mir

I agree with this. Outside of the greater point that passengers expect for the price of fuel to be a part of the total fare in the first place, lumping in an arbitrary "fuel surcharge" in the taxes/fees section is incredibly deceptive.

Taxes and fees should be separate anyway - taxes should very clearly point out what the airline does not keep, while fees should cover what airlines do keep (assuming, again, that the inane idea of a fuel surcharge persists moving forward).

Throwing the fuel surcharge in the middle of a bunch of government imposed fees clearly is just a ploy by the airlines to create the idea that a larger proportion of the the total fare is taxes than is really the case. It is dishonest in my opinion.

I agree with most here that the airlines are unfairly taxed, but given the profits being made this smacks of greed to me and definitely lessens my sympathy towards the airline's position.

There are better ways to inform the public of the high tax burden faced by aviation than pulling a stunt like this.
 
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flyingturtle
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 8:16 pm

Quoting D L X (Reply 186):
Now, it is my OPINION that this is a good thing. Taxes have grown pretty crazy (especially in Europe!!!) and I think a large reason for that is the obscuration of those taxes.

Why should the fight against higher taxes be fought on the backs of the consumers?

Well, I cannot see your problem.

Here I've photographed a grocery receipt (I bought bread, milk, sausage and cheese, btw), the thing on the right is a train ticket.



Arrows show the total sum I've paid. In the grocery receipt, you see how much I've spent in taxes (VAT, German abbreviation MWST): Tax group 1 (groceries, nutrition), tax rate is 2.50%, the total was 13.00 CHF, and so I spent 0.32 CHF in taxes.

On the train ticket, I spent 8.00% in VAT - "INKL" means "inclusive" or "included".

Yes, the total price for each item was displayed on the shelf. So I knew the shopping would end up at 13 CHF without resorting to calculations.


David

[Edited 2014-04-21 13:27:56]
Reading accident reports is what calms me down
 
DesertAir
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 8:26 pm

I live in Mexico and have become accustomed to seeing prices everywhere with taxes included. When I go to buy something, the price listed is the price. When I buy an airfare I am interested in the bottom line...how much will it cost? I think we made a big step forward including taxes in airfaire. Let´s not take a big step backwards.
 
D L X
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 8:28 pm

Quoting Scorpio (Reply 189):
In this case, the loudest voices here have been the few people defending this measure. So you're right, the loudest voices aren't always the most correct ones. And yes, prices in the US are typically listed without taxes. Ask foreigners who come to the US what they think about that. Nine out of ten will call it one of the most annoying things about visiting the US. Several people have said it here. And as I've said before: I've never heard a single American coming to Europe complain about our advertised prices being the actual price they're paying at checkout. I repeat once more: that makes it very clear to me which is the superior system...

Wow. Did I kick your puppy or something? Sorry to evoke such a strident response!

Yes, there are differences between the way you do things on your side of the ocean and the way we do things here. I don't even think I've been critical of your way, if it works for you, cool. Over here, we have traditionally done it a different way, in every way except airline tickets. (And to be 100% honest, gasoline also.) That is the way that has worked for us, and it has helped apply downward pressure on our taxes.

Quoting usairways85 (Reply 187):

I find it rather nice that when I look for airfare the price I initially see is the actual price and I don't have to go all the way to the final screen for the taxes & fees to be added.

If I'm not mistaken, a couple years ago, Orbitz would put the total price alongside the base+tax prices on the same squares in their matrix. I thought this was a good way to do it.
 
Scorpio
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Joined: Thu Oct 04, 2001 3:48 am

RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 8:36 pm

Quoting D L X (Reply 193):
Wow. Did I kick your puppy or something? Sorry to evoke such a strident response!

Don't give me that. All I've done is repeat what I'd already said before, and which many people agreed with me on.

Quoting D L X (Reply 193):
Yes, there are differences between the way you do things on your side of the ocean and the way we do things here. I don't even think I've been critical of your way, if it works for you, cool. Over here, we have traditionally done it a different way, in every way except airline tickets. (And to be 100% honest, gasoline also.) That is the way that has worked for us, and it has helped apply downward pressure on our taxes.

As I've said: most people knowing our system coming to you complain about your system. Most people knowing your system coming to us don't complaim about ours. Just because you've always done it doesn't mean it 'works better' for you. You just don't know any different. I also find you claim that listing prices without taxes 'helped apply downward pressure on taxes' to be dubious at best. It once again comes down to the silly idea that without prices being listed without taxes, people don't know how much they're paying in taxes. As me and pretty much everyone else not from the US has already said, that simply isn't true.
 
D L X
Posts: 12719
Joined: Thu May 27, 1999 3:30 am

RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 8:55 pm

Quoting Scorpio (Reply 194):

Quoting D L X (Reply 193):
Wow. Did I kick your puppy or something? Sorry to evoke such a strident response!

Don't give me that.

I'm just trying to be polite. But with this vitriol. you're making me feel that is unnecessary.

Quoting Scorpio (Reply 194):
All I've done is repeat what I'd already said before, and which many people agreed with me on.

Your argument to me has been "I'm right and you're wrong because more people agree with me." Sorry, but this is a matter of opinion, and it's quite arrogant to believe that one's opinion is inherently more just than others just because one believes others agree with him.

Quoting Scorpio (Reply 194):
Just because you've always done it doesn't mean it 'works better' for you. You just don't know any different

I'm sure you are aware that the exact same thing can be said of the system you defend.
 
YoungDon
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Joined: Thu May 31, 2001 9:33 am

RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 8:56 pm

Quoting D L X (Reply 193):
Yes, there are differences between the way you do things on your side of the ocean and the way we do things here. I don't even think I've been critical of your way, if it works for you, cool. Over here, we have traditionally done it a different way, in every way except airline tickets. (And to be 100% honest, gasoline also.) That is the way that has worked for us, and it has helped apply downward pressure on our taxes.

The issue to me is that the way we do it does not make sense. We do have lower taxes than Europe, but I don't attribute much of it (if any at all) to the fact that we primarily use "unbundled" pricing as opposed to the bundled model most of the world uses. In my opinion, that's like saying "we drive further because miles are a longer unit of measure than kilometers." Our lower taxes are a direct reflection of our priorities in this country - I seriously doubt bundling taxes society-wide would have much effect on our lower tax base - the people who are tax-watchdogs will still pay attention to where every penny of what they pay is going and you will still have the vast majority who understand that taxes are included and not invisible.

I don't see anything for the consumer to gain here - a battle over tax policy should not cause consumers to have to return to a system that was abolished for a reason. Consumers who want to know the entire breakdown of airline tickets costs can get that information right now. If airlines want to make the case that their tax burden is too high, they have avenues upon which to do that - lobbyists in DC and in relevant statehouses, and mass advertising if they want to take their argument to the public at large.

What the airlines are trying to do is as deceptive as what they accuse the government of doing.

[Edited 2014-04-21 13:59:05]
 
Scorpio
Posts: 5050
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 9:19 pm

Quoting D L X (Reply 195):
Your argument to me has been "I'm right and you're wrong because more people agree with me." Sorry, but this is a matter of opinion, and it's quite arrogant to believe that one's opinion is inherently more just than others just because one believes others agree with him.

I have, on several occasions throughout this thread clearly explained why I find the system we have to be better, as have many others, including several of your fellow countrymen. The only reasons so far brought up by the few people defending your system have been political reasons, and even there the premise (that people need for the sales tax to be added at checkout to realise how much tax they're paying) has been shown to be false. So no, I do not base my assessment that our system is better solely on the fact that more people here agree than disagree with me (though, as this is a system aimed at consumers, much higher consumer preference and satisfaction IS IMO an important criteria to determine what is the best system), I also base it on the argumentation used, and the fact that the only argument used in favor of this measure has been shown to be incorrect.

Quoting D L X (Reply 195):
I'm sure you are aware that the exact same thing can be said of the system you defend.

No, in fact, it can not. As I've said twice before now, people who are used to our system overwhelmingly have a negative opinion about your system when visiting the US, while the opposite is not the case. I even see most Americans here opposing giving airlines the ability to advertise without taxes, and several going as far as saying they'd prefer if the US switched to a taxes included pricing model for everything. So no, the same thing can not be said.
 
rwy04lga
Posts: 1976
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 9:37 pm

Quoting FlyPNS1 (Reply 4):
Let's say I had two tickets: Ticket A ($80 goes to airline and $20 goes to tax) or Ticket B ($50 goes to airline and $30 goes to tax).

On a given route, wouldn't the taxes be the same and not $20 v. $30?
Just accept that some days, you're the pigeon, and other days the statue
 
Mir
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RE: Airlines May Soon Advertise Fares Without Taxes

Mon Apr 21, 2014 10:29 pm

Quoting Viscount724 (Reply 183):
What airlines are specifically referring to a fuel surcharge in the fare breakdown as a "tax"?

You'd have to ask danman132x - he's the one who described his fare breakdown.

But I did some looking myself. Here's the fare information for the same trip on DL, AA and UA, between MSN and FRA. The same dates were used, always picking the lowest available fare with the fewest stops that didn't involve an overnight stay in transit.

DELTA:

On the website, the first fare the passenger sees is the total price: $1803.80. After flights have been chosen, the fare breakdown appears:

Price per passenger: $1618.00
Taxes, fees and charges: $185.80
Total per passenger: $1803.80


If one clicks on the "Total per passenger", one can see a further breakdown of the taxes, fees and charges:

AIR TRANSPORTATION CHARGES

Base Fare: $1102.00
International Surcharge: $516.00

TAXES, FEES AND CHARGES

US Tax: $35.00
US 9/11 Security Fee: $7.50
Passenger Facilities Charge: $13.50
US Animal and Plant Health Inspection Service Fee: $5.00
US Immigration and Naturalization Service Fee: $7.00
US Customs User Fee: $5.50
DE Tax: $9.10
RA Tax: $44.90
OY Tax: $58.30

TOTAL PER PASSENGER: $1803.80


For this ticket, what is labeled as "taxes, fees and charges" amounts to about an extra 12% on top of the base fare. I can't speak to whether the international surcharge is appropriate, but in any case it's a carrier-imposed fee and is included in the "price per passenger", so DL isn't trying to pass it off as a tax.


AMERICAN:

The fare advertised is $1859. No breakdown of taxes and fees is shown. Clicking on "price details", however, displays the following:

Base fare: $1157.00

Carrier-Imposed Fees: $516.00
Air Transport Tax (Germany): $58.30
Security Tax (Germany): $9.10
Passenger Service Charge (Germany): $44.90
US APHIS User Fee: $5.00
Transportation Tax (US): $35.00
Passenger Facility Charge (US): $13.50
US Federal Inspection Fee: $7.00
US Security Fee: $7.50
US Customs User Fee: $5.50

Total taxes and carrier-imposed fees: $701.80


For this ticket, "taxes and carrier-imposed fees" amount to about an extra 60% on top of the base fare, however three-quarters of that is carrier-imposed fees. I suspect that this is the international surcharge, since it's the same amount as Delta's. But Delta lumps that in with the airfare, whereas American lumps it in with the taxes.


UNITED

The fare advertised is $1794, which turns into $1793.80 once flights have been selected. The fare is broken down into:

1 Adult: $1608.00
Additional Taxes/Fees: $185.80


Clicking on "Additional Taxes/Fees" reveals the following:

U.S. Federal Transportation Tax: $17.50
September 11th Security Fee: $2.50
September 11th Security Fee: $2.50
U.S. Passenger Facility Charge: $4.50
U.S. Passenger Facility Charge: $4.50
September 11th Security Fee: $2.50
U.S. APHIS User Fee : $5.00
U.S. Immigration User Fee: $7.00
U.S. Customs User Fee: $5.50
Germany Airport Security Charge: $9.10
Germany Passenger Service Charge: $44.90
Germany Air Transportation Tax: $58.30
U.S. Federal Transportation Tax: $17.50
U.S. Passenger Facility Charge: $4.50


For this ticket, "Additional Taxes/Fees" amount to about an extra 12% on top of the base fare, just like Delta's.

Rating these by transparency of taxes, I'd rate UA first. They provide a clear breakdown of what goes to the airline and what goes to the government immediately after flights have been selected, and a further breakdown of what's in the government taxes and fees is easily accessible. I also like the way they label what each tax is, instead of using the IATA codes as DL does, and mention which country is charging the tax or fee. I dislike, however, how they list each charge individually (i.e. they have three separate Passenger Facility Charges of $4.50 each, whereas DL lists only one PFC of $13.50) - if you knew how those fees worked it would be clear, but to the average person it's more confusing.

DL is a very close second, let down only by the use of IATA codes for certain individual taxes, which the average person is not going to have a clue about. Of course, there aren't going to be that many people who care that deeply, but since this is measuring transparency, it gets mentioned.

A very distant third is AA. They do not offer an upfront breakdown of the total fare to show how much is taxes - you have to click on a link to see it. And then when you do click on that link, AA lumps a fee they charge (which figures to be the international surcharge, since it's the same amount as DL's) in with the taxes instead of as a component of the base fare. This could lead a customer to believe that taxes were adding 60% to the base fare, which is quite a lot. However, the vast majority of that is not going to the government at all, but instead into the carrier's pocket. Take the carrier-imposed fees out and the taxes come out to $185.80 - exactly the same as with DL or UA, and about 11% on top of the base fare (if the base fare were to include the carrier-imposed fees). So AA actually has lower taxes as a percentage of the fare than DL or UA, but you wouldn't necessarily know that from the way they show it (the percentage point difference is due to the AA fare being a bit more expensive than the DL or UA fares, while the taxes remain the same). This is a perfect example of misleading advertising, and it's something the DOT should do something about.

Quoting D L X (Reply 184):
To be fair, that has ALWAYS been the American style of price advertising.

Just because it's always been done a certain way doesn't mean that's the best way of doing things.

Quoting D L X (Reply 184):
When you go to the grocery store and buy a bunch of bananas for $1, and the store charges you $1.05, you know exactly how much the government is upcharging. When you buy plane tickets, you don't.

As has been pointed out by me and many others on this thread, you do know exactly how much the government is upcharging when you buy an airline ticket. The airlines give you a fare breakdown for what part of the total is airfare and what part is taxes. Why is that not sufficient?

Quoting D L X (Reply 188):
It is obviously already well known to a not-so-small number of us that the taxes are getting absurd. (I recently booked a flight to Europe, and the fees actually doubled the fare.)

Did they really, though? You might want to check that breakdown again.

-Mir
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