US Airlines Pocket Savings from “Tax Holiday”

Monday, 25 July 2011 | by Pat's Picks

The ongoing debt ceiling debate in Congress could’ve produced a satisfying perk: lower airline ticket prices. Federal ticket taxes expired last Friday due to the stalled budget talks. But instead of passing the savings forward, most US airlines chose to simply pocket the money.

Basically what happened is this: Congress failed to pass legislation by midnight on Friday that would keep the FAA up and running. That means the federal ticket taxes, which usually run about $25 on a $300 round-trip ticket, expired. Airlines faced a choice: they could either do nothing and let customers enjoy the savings or they could re-jigger their fares to absorb the savings for themselves. American, United, Continental, Delta, US Airways, Southwest and AirTran all chose the latter.

How nice. USA Today says Spirit, Virgin America and Alaskan Airlines were among the few that chose not to raise their prices. JetBlue said on its website that it will not add in the expired taxes on tickets booked this week and it will offer some refunds to customers who bought tickets prior to July 23.