Part of the reason airlines love ancillary fees is that they're not taxed. Some fees, such as the "peak travel" surcharges, which are essentially part of your ticket, are subject to the 7.5 percent excise tax levied against fares. But ancillary fees such as checked-bag fees are not considered by the IRS to be related to the transport of a person, and therefore not taxed at all.
Anyone who's ever flown would likely suggest this is a fundamental misunderstanding of the traveling experience. Of course checked bags are related to the transport of a person! Would any reasonable traveler take a weeklong trip without a few changes of clothes? (Hmm ... don't answer that.)
Thing is, the Federal Aviation Administration (FAA) could use some extra revenue. The Government Accountability Office (GAO) just released a study outlining both the decline of the FAA's Airport and Airway Trust Fund and the subsequent untaxed rise of bag fee revenue, concluding that taxing bag fees alone could increase Trust Fund revenues by 1 or 2 percent. The GAO acknowledged that this is a small number, but cited recent trends, notably a 33 percent rise in bag fee revenue so far this year, to suggest greater revenue potential down the road.
Naturally, the airlines oppose taxing fees....read more»
Looking to escape the Phoenix heat for a quick getaway? There are plenty of travel deals to choose from, including last-minute deals and bargains for travel through the end of the year....read more»
Airline fees are all about gaining a competitive advantage. Legacy lines, in particular, simply cannot compete on cost compared to low-cost airlines, which operate leaner, more efficient route networks than larger lines. Fees allow legacies to compete on price and cover their costs. In Spirit's case, adding fees allows the airline to advertise extremely low fares, and use those advertised fares to brand itself as the cheapest option out there, whether or not that is actually true.
And it's exactly this competitive advantage that sends airlines running for the hills when the issue of fare transparency comes up.
In yesterday's House Subcommittee on Aviation hearing on the subject of airline fees, Congresswoman Laura Richardson asked Spirit Airlines CEO Ben Baldanza a very simple question: Why wouldn't Spirit agree to submit its list of ancillary fees so they could be included as a full-fare display on sites such as Travelocity? After hemming and hawing a bit, Baldanza admitted, "We wouldn't want to be at a competitive disadvantage."...read more»
The House Subcommittee on Aviation is holding a hearing on airline fees Wednesday, which will feature testimony from a number of interested parties. Spirit CEO Ben Baldanza will be there, as well as representatives from Southwest and a handful of other groups. I'll be there, too, but just to watch and report back to you
In advance of the hearing, numerous organizations are sharing their feelings about bag fees, and since most of the groups speaking up are pro-consumer, we're not talking about warm and fuzzy feelings here....read more»
The Wizarding World of Harry Potter opened on June 18, and already over a half-million visitors have braved the flagship ride, Harry Potter and the Forbidden Journey. This confirms the fear that keeps parents up at night: The theme park based on perhaps the most successful series of books in the history of literature is incredibly popular—meaning their kids will want to go—and crowded, meaning it will be rather miserable.
So crowded, in fact, that Universal Studios is improvising ways to tame the hordes of visitors clamoring for a glimpse of Harry Potter's world. The Orlando Sentinel reports that Universal is advising visitors to postpone visiting the park until after 3 p.m. Universal is also handing out paper tickets, similar to raffle tickets, to prevent people from cutting the long line that forms each morning, and giving people receipts with return times on really busy mornings....read more»
Back in the winter we began tracking European summer rates, and since then have seen many peaks and valleys in fare fluctuations. Volatility has been significant on certain routes such as those affected by the volcanic ash. Absent of catastrophes though, it's much less difficult to observe dramatic dips and gains on a route.
For example, the Los Angeles/Paris route holds steady and hasn't deviated more than 6 percent since we began running comparisons. Madrid flights went up just slightly in May and/or June but have settled back down to a nice pace with early spring rates. Yes, for the most part, you would have been better off purchasing peak summer rates during the winter, but rather than shoulda, coulda, woulda laments, it's better to look at a second option....read more»
The Associated Press (AP) reports that the Federal Aviation Administration (FAA) has ordered airlines to inspect the cockpit window heaters on some 1,212 Boeing aircraft, and possibly replace the windows as well.
The order comes after a lengthy investigation into numerous incidents, ranging from cockpit fires to shattered windshields to a form of electrical discharge know as arcing. Several of these incidents have resulted in emergency landings.
The AP reports that the source of the problem, a loose screw that chafed the window heaters' wiring, was first noted in 2004. Since then, the National Transportation Safety Board (NTSB) has been urging the FAA to order airlines to replace the windows with a new design that uses pins instead of screws. The FAA order actually falls short of that request ...read more»
Delta, American, and Hawaiian have been granted permission to fly into Tokyo's Haneda Airport. The three airlines were among several vying for the slots, which became available when the U.S. and Japan reached an Open Skies agreement earlier this year. Haneda, which is close to downtown, has been off limits to American carriers since 1978, forcing U.S. airlines to fly into Tokyo's much further removed Narita airport.
The approved routes are as follows:
- Delta: Two routes, from Los Angeles and Detroit
- American: One route, from New York (JFK)
- Hawaiian: One route, from Honolulu
Hawaiian will begin service October 31, with American coming later, on January 20, 2011. Delta said it will announce schedules in the coming weeks....read more»
I'm a sucker for airfare fluctuation tracking tools. I look forward to SmarterTravel airfare editor Patricia Magaña's monthly comparison of airfare prices to Europe, when I've got a route in mind I'll swing by Bing and check out its Price Predictor tool, and I'm always interested in the latest Priceline Airfare Index.
This week, the Airfare Index is pointing to some interesting week-over-week airfare changes. The biggest price drop is from Washington, D.C., to Boston, with a price decrease of 25 percent. A number of Florida routes (including Atlanta to Ft. Lauderdale, New York City to Miami, and Newark to Orlando) are also cheaper this week....read more»