Taxes make your airline ticket about 20 percent more expensive
US President Barack Obama (L) and Mexican President Enrique Pena Nieto shake hands during a joint press conference at the National Palace in Mexico City on May 2, 2013.
When consumers think about airline fees, they typically think about baggage fees or the cost of extra legroom. Most don't notice the taxes and fees tacked onto the base fare itself. At least one of them will likely double next year.
There are four main federal taxes on a domestic airline fare. The Federal Excise Tax, Passenger Facility charges, Federal Segment Fees, and a September 11th security fee.
Roughly translated, these are taxes and fees that support air traffic control, airport upkeep and improvements, and TSA screenings. The amount of taxes and fees on an individual ticket varies, depending on how many stops the flight makes, what airport is used and so on. But a typical $300 roundtrip domestic ticket is about 20 percent taxes.
Airport officials are urging Congress to let them raise the cap on the passenger facility charge. Mark Brewer, chair of the American Association of Airport Executives, recently told Congress the money was needed to pay for critical infrastructure projects, especially in light of federal funding cutbacks.
Jean Medina, spokeswoman for the trade group Airlines for America, says passengers are already overtaxed. "We've just seen an increase likely going to be approved this week on the TSA fee, which is more than doubling the TSA fee, so we're hopeful they will not raise this fee," Medina says.
Under the Bipartisan Budget Act of 2013, TSA security fees would more than double the fee for a one-way flight to $5.60 starting next year. And if airports canpersuade Congress to let them raise the cap on airport fees, the cap on Passenger Facility Charges would go up from $4.50 (per flight leg) to $8.50.
Rick Seany, CEO of Farecompare.com, believes Congress won't approve the facility charge increase.
"I think airlines push back a lot on these things because it raises the ticket prices," says Seany. "That means they can't raise prices." Seany says airlines tried to raise ticket prices 12 times this year "with little success."