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Record Airline Fees Spurred By Bad Tax Policy

July 15, 2015 Association No Comments Email Email

WASHINGTON – U.S. Travel Association President and CEO Roger Dow issued the following statement on reports that U.S. airlines reaped record revenues from ancillary (checked bag, ticket change, etc.) fees in 2014:http://www.destination-asia.com/

“It’s en vogue among American travelers to bash airlines for these fee structures, but what few realize is that federal tax policy creates the perverse incentive for airlines to hide as much of their revenue as possible in fees. When the IRS ruled in 2009 that the cost of a ticket is taxable but ancillary fees aren’t, it unleashed a pricing sea change on the part of airlines that irritates travelers, and understandably so.

“We should be griping at Congress, not just the airlines. The federal legislature could tackle the ancillary fee phenomenon if it wanted to, cutting ticket taxes to eliminate the bag fee incentive and moving the entire passenger aviation system to a user fee model that would both be fairer and result in tangible infrastructure improvements for travelers. There are plans on the table to achieve exactly that, and the Federal Aviation Administration reauthorization that must be addressed this year is the perfect opportunity for Congress to achieve something that might actually garner some kudos from consumers.”

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