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Airlines oppose potential plane ticket hike on the horizon

Posting in Transportation

The U.S. Congress isn't expected to raise taxes as part of the 2014 budget, but "user fees" may be increased, a move that lobbyists warn could raise the price of airline tickets.

As reported by CNN, at the moment, passengers pay $2.50 for every leg of a flight, but destination fees are capped at $5. For example, a standard flight costs U.S. consumers $2.50 there and $2.50 back, but if a stopover is included, this is increased each way to $5.

If a hike goes ahead, this means that security fees may double to $5 per trip, one way, although multi-leg trip prices are predicted to stay the same. While it is unclear if this rise will be passed on across the board to passengers -- or if airlines will choose to front the whole or part of the bill -- Nicholas E. Calio, President and CEO for industry trade organization for the U.S. airlines, Airlines for America (A4A) said:

"Airline passengers already pay more than their fair share in taxes to the federal government. It's unreasonable and unnecessary for budget negotiators to be looking to squeeze any more out of an already overtaxed industry and their customers. We understand the difficulty of the challenge they are trying to meet, but respectfully suggest they look elsewhere to plug the budget hole."

The A4A, Air Line Pilots Association (ALPA), Global Business Travel Association (GBTA), International Air Transport Association (IATA), Consumer Travel Alliance, Aeronautical Repair Station Association (ARSA) and the Regional Airline Association (RAA) have all written to Congress to oppose the hike.

However, Marc Goldwein, senior policy director at the Committee for a Responsible Federal Budget, says that the fees could raise approximately $13 billion if started immediately -- which would make up for some of the budget cuts elsewhere that have been proposed. As a result, other "user fees" are expected to be put on the table for the next budget. 

The deadline for such a move is January 15. 

A4A says that since 1990, the number of aviation fees has increased from six to 17 and the total amount paid has grown from $3.7 billion to $17 billion. The tax burden on a typical $300 round-trip ticket has nearly tripled from $22 to $61, and air travel is usually taxed at higher rates than for products including alcohol and tobacco. 

Via: CNN

Image credit: Airbus

— By on December 3, 2013, 6:45 AM PST

Charlie Osborne

Contributing Editor

Charlie Osborne is a freelance journalist and photographer based in London. In addition to SmartPlanet, she also writes for business technology website ZDNet and consumer technology site CNET. She holds a degree in medical anthropology from the University of Kent. Follow her on Twitter. Disclosure