Fliers squeezed by government fees
Taxes and charges on airline tickets are growing even as fuel prices skyrocket.
By Aaron Smith, CNNMoney.com staff writer
Last Updated: May 15, 2008: 2:18 PM EDT
NEW YORK (CNNMoney.com) — As if high fuel prices aren’t enough, airlines and passengers are getting pinched by rising taxes as the U.S. government demands a bigger piece of the pie.
About 20% of the price of a $300 domestic round-trip ticket goes to taxes and fees, according to the Air Transport Association, compared with 13% in 1992 and 7% in 1972.
“When the government decides to throw another tax on passengers, that is greatly hurting an already financially hurting industry,” said ATA spokesman David Castelveter. “We’ve long said that we are one of the most overtaxed industries, and we now are dealing with record-level fuel increases. The airline industry is in a worse financial situation than it was on 9/11.”
A ticket price dissected
Rick Seaney, chief executive of online ticket vendor Farecompare.com, estimated that the U.S. government reaped $40 billion in airline ticket taxes in 2007.
Seaney broke down the price of a $300 domestic round-trip flight:
$146.15: Roundtrip airfare
$93.02: Fuel surcharge
$18.00: Passenger facility charge toward airport improvements
$14.00: Federal flight segment tax to Federal Aviation Administration projects
$10.00: Sept. 11 security fee to the Transportation Security Administration
$11.85: Federal sales tax (7.5%) on airfare
$ 6.98: Federal sales tax (7.5%) on fuel surcharge.
