Heads up for Americans waiting to buy tickets

[Texas Skibum]

If you wait until Saturday to buy tickets you MAY get a cheaper airfare.

 

Story

 

In summary, the ability for the airlines to collect federal fees when you buy airline tickets from them is going to expire Saturday if no action is taken (and is likely). As mentioned in the story, this means that on a $300 ticket you should save around $61. I assume this means that this would mean a savings of about $305 on a $1500 ticket to BKK.

Edited July 22, 2011 by texasskibum

[Joltin' Joe]

Thanks for the info Texbum. Have been watching prices planning for trip in Nov/Dec. The $300 savings will be put to good use in Patts

[furryman]

If you wait until Saturday to buy tickets you MAY get a cheaper airfare.

 

Story

 

In summary, the ability for the airlines to collect federal fees when you buy airline tickets from them is going to expire Saturday if no action is taken (and is likely). As mentioned in the story, this means that on a $300 ticket you should save around $61. I assume this means that this would mean a savings of about $305 on a $1500 ticket to BKK.

 

 

I don't doubt the Feds will figure out a way to collect the taxes they missed. Honestly I'd just as soon pay the taxes up front instead of turning up at the airport to find the airline wanting me to pay them last minute before boarding.

[PepeLePew]

What's the latest?

 

I'm not American (obviously) just interested.

[Luv2Phuket]

In the words of Lee Corso (pencil in hand): NOT SO FAST, MY FRIEND!

 

In typical fashion, it looks like we -- the tax-paying, flying public -- will go f*cked once again. Here's what a WSJ article just said:

 

"JP Morgan analysts predicted airlines would pocket the revenue, rather than pass the savings on to consumers, and the industry could benefit by $25 million a day.

Airlines will no longer apply a 7.5% federal excise tax on each ticket, or a $3.70 tax applied to each flight segment. Arizona-based US Airways Group Inc. began adjusting fares Friday so that consumers would see no difference in ticket prices, even without taxes. Analysts expected other airlines to follow suit."

 

 

A couple of thoughts/concerns:

- I would think that the excise tax would not apply until the date of your flight (I think if you cancel a flight, they refund the taxes -- at least they do on award tickets), so buying a ticket today -- even if they don't charge the tax -- may not save you in the long run, as they could hit you with the re-imposed fees by the time your flight rolls around

- while I used to be a staunch conservative, the greed of corporate America has really taken its toll on me. That being said, I can see them keeping he fares the same if it is possible the Feds are going to come back in a few months and say "you owe us the excise tax on Footy PJs flight"

[Joltin' Joe]

In the words of Lee Corso (pencil in hand): NOT SO FAST, MY FRIEND!

 

In typical fashion, it looks like we -- the tax-paying, flying public -- will go f*cked once again.

 

- while I used to be a staunch conservative, the greed of corporate America has really taken its toll on me.

 

That greed is taking a heavy toll on 99% of us. That's another reason why retiring to LOS sounds better to me all the time.

[Luv2Phuket]

BTW, if anyone in U.S. buy a ticket after 12:01 a.m. (and I assume that is East Coast time), PLEASE send me a PM. I'd like to hear about whether the tax was imposed (even thought they have no authority to do so), whether the price stayed the same or was reduced, etc.

 

I'd be very interesting in seeing if there is possible actionable conduct.....

 

(yes, I am a greedy S-O-B, too! LOL!)

[philobert]

BTW, if anyone in U.S. buy a ticket after 12:01 a.m. (and I assume that is East Coast time), PLEASE send me a PM. I'd like to hear about whether the tax was imposed (even thought they have no authority to do so), whether the price stayed the same or was reduced, etc.

 

I'd be very interesting in seeing if there is possible actionable conduct.....

 

(yes, I am a greedy S-O-B, too! LOL!)

 

 

It should be easy to tell. all taxes and fees are supposed to be broken out in detail on the final bill. i too am trying to see what i can get for a ticket price (they seem quite high right now!). will be interesting to see what happens.

 

please keep us posted if anyone knows!!

 

cheers

 

bert

[Texas Skibum]

In the words of Lee Corso (pencil in hand): NOT SO FAST, MY FRIEND!

 

In typical fashion, it looks like we -- the tax-paying, flying public -- will go f*cked once again. Here's what a WSJ article just said:

 

"JP Morgan analysts predicted airlines would pocket the revenue, rather than pass the savings on to consumers, and the industry could benefit by $25 million a day.

Airlines will no longer apply a 7.5% federal excise tax on each ticket, or a $3.70 tax applied to each flight segment. Arizona-based US Airways Group Inc. began adjusting fares Friday so that consumers would see no difference in ticket prices, even without taxes. Analysts expected other airlines to follow suit."

 

 

A couple of thoughts/concerns:

- I would think that the excise tax would not apply until the date of your flight (I think if you cancel a flight, they refund the taxes -- at least they do on award tickets), so buying a ticket today -- even if they don't charge the tax -- may not save you in the long run, as they could hit you with the re-imposed fees by the time your flight rolls around

- while I used to be a staunch conservative, the greed of corporate America has really taken its toll on me. That being said, I can see them keeping he fares the same if it is possible the Feds are going to come back in a few months and say "you owe us the excise tax on Footy PJs flight"

 

 

You know, I actually thought about this scenario while I was writing the OP. The thing is, I figured this was a 50/50 thing. As I'm sure you're aware, with the airlines there is always the question of whether all the other airlines will do the same thing as the others. For instance, many times one airline will raise fares expecting the others to follow suit. However, in many cases they don't so the airline has to lower their rates down to be competitive again.

 

I sort of suspect that one of them will have to "blink" at some point to get some potential extra revenue and the others will have to follow at least for a short period of time.

Edited July 23, 2011 by texasskibum

[Crash]

- while I used to be a staunch conservative, the greed of corporate America has really taken its toll on me. That being said, I can see them keeping he fares the same if it is possible the Feds are going to come back in a few months and say "you owe us the excise tax on Footy PJs flight"

While I would agree that corporate America can be greedy, it would be hard to accuse the airline industry of participating. Hell, their business model is barely sustainable!

 

If you can find a suitable greedy corporation, I would suggest that you buy shares immediately. ;-)

[SlowlyMan]

Found a good deal this morning. The fare to Chicago never changes because only two airlines serve this part of the world.

 

The fare on United dropped $50 and still including the fed tax. American's fare went up $60.

 

Like I said, this fare never changes, so I don't know what these guys are up to. Maybe capitalizing on the publicity. Regardless I got a ticket for $50 less. One more BF Whoo HOo

[CJ-PAF]

Did the tax bill expire or is the tax office going to be closed for some imaginary shutdown? Unless the tax law itself expires, they will still collect it and pay it to the govt. when the office reopens.

[Texas Skibum]

Did the tax bill expire or is the tax office going to be closed for some imaginary shutdown? Unless the tax law itself expires, they will still collect it and pay it to the govt. when the office reopens.

 

I think you missed the crux of the story. What you're saying is exactly what the story was about.

 

This said, still no noticeable change in prices yet.

[Luv2Phuket]

I think you missed the crux of the story. What you're saying is exactly what the story was about.

 

This said, still no noticeable change in prices yet.

 

 

I've been following this on FlyerTalk -- a site similar to this, but for frequent flier mile addicts! LOL! -- and it appears a few people are finding bargains on United and Delta, but other carriers (notably, Southwest and US Air) have raised fares to cover the difference.

 

I think that you have to push it all the way through to the actual purchase to see that the taxes are not being applied.

[DNice757]

I actually stumbled across the tax issue by accident. I'm planning a trip to Costa Rica for the Halloween weekend and was keeping an eye on the airfare. On Friday, the price was ($313 before the $91 in taxes added on ). Being bored at work Saturday morning, I check again. The total price was $371. It threw me off because the amount before taxes was the same. I checked the breakdown of the taxes and it was $58 instead of $91. That's when I started to research and found out about what's going on. Looks like I hit the window in time. An hour after I purchased my ticket, Continental increased the base airfare by $58 to make up the loss in taxes lmao. Lucky I guess. Just wish I was planning a trip to Thailand but that's not til next year.

 

 

DNice757

Edited July 24, 2011 by DNice757

[Joltin' Joe]

News out this morning..... All but a few regional Airlines, I think Alaska Air was one of them, raised their fares the amount they would have dropped from the break in tax collection. With all the pissing and moaning about the deficit, you'd think our genius elected public servants would have arranged to keep the revenue portion of the government operating. Airline lobby must be stronger than I thought.

 

I wonder if they'll stop collecting income taxes from working stiffs tomorrow if the clowns in Washington can't come to some agreement by this afternoon.

[furryman]

I actually stumbled across the tax issue by accident. I'm planning a trip to Costa Rica for the Halloween weekend and was keeping an eye on the airfare. On Friday, the price was ($313 before the $91 in taxes added on ). Being bored at work Saturday morning, I check again. The total price was $371. It threw me off because the amount before taxes was the same. I checked the breakdown of the taxes and it was $58 instead of $91. That's when I started to research and found out about what's going on. Looks like I hit the window in time. An hour after I purchased my ticket, Continental increased the base airfare by $58 to make up the loss in taxes lmao. Lucky I guess. Just wish I was planning a trip to Thailand but that's not til next year.

 

 

DNice757

 

Make sure to let us know if they come back to get those taxes!

[Texas Skibum]

I was just watching a briefing with the transportation secretary for the U.S. and he was saying that the airlines are actually collecting this money still under the guise of it being a tax, but are pocketing the money.

 

The press people were asking if customers would get refunds since the airlines were collecting the money under false pretenses and he was basically side stepping the issue and worrying more about whether the government would be able to re-coup the money after the fact.

Edited July 28, 2011 by texasskibum

[philkrenshaw]

The reason the "law" on the taxes has not been renewed is that Congress is fighting about another aspect of it involving how easy/hard it will be for the workers to form unions. I think you can guess which party is on which side of the argument. Most US airlines have been through bankruptcy in the last decade or two and come out of it with large concessions from unions so they can compete with non-union airlines like Southwest. I think the goal of the unions is to get all airlines unionized so they can all raise wages/prices (and eventually go bankrupt again, I suppose).

[Joltin' Joe]

Today's news is that the airlines cannot charge you full fare (tax inc.) while the U S is not collecting the tax. It they do, you can write the airline a letter requesting a refund of the tax amount. If they don't comply, the IRS is coming out with a form that will get you a credit for the tax amount. Guess they'll then go after the airline for the difference.

[Joltin' Joe]

Checked KAYAK travel site this morning, found an interesting comparison. Delta Airlines is the primary airline at the closest airport to where I live. They usually offered the most flights and best prices. This morning, ticket prices to BKK are about $250 lower on United than on Delta.

 

Any fellow BM familiar with United / Delta price comparisons, advice would be appreciated. Is United offering lower fare the norm and I just never noticed, or is United now showing lower prices from your home airport? Maybe they are no longer 'pocketing' the tax money the govt. is not collecting. From the news I've read, the airlines are supposed to offer the normal fare NOT including the amount of the tax. Trying to find out if United is actually doing that.

[newman85]

Can't comment on Delta comparisons but my Kayak searches have UA and CO tickets up 25-30% to BKK since the partial FAA shutdown. It seems keeping the tax/fee money isn't enough for them :( I'm hoping prices come back down before my Dec trip.

[SlowlyMan]

Checked KAYAK travel site this morning, found an interesting comparison. Delta Airlines is the primary airline at the closest airport to where I live. They usually offered the most flights and best prices. This morning, ticket prices to BKK are about $250 lower on United than on Delta.

 

Any fellow BM familiar with United / Delta price comparisons, advice would be appreciated. Is United offering lower fare the norm and I just never noticed, or is United now showing lower prices from your home airport? Maybe they are no longer 'pocketing' the tax money the govt. is not collecting. From the news I've read, the airlines are supposed to offer the normal fare NOT including the amount of the tax. Trying to find out if United is actually doing that.

 

United has been pricing aggressively lately. If you pull up the seat chart, you will probably see why. When I checked last week the plane was empty ( at least no seats had been assigned) I booked with them even though AA had a better schedule because the pricing was soo good.

 

Contrary to what Washington likes to tell us, we are in a deepening recession. People just don't have disposable income. I'm sure Bookings are down across the board.

[Luv2Phuket]

I heard on the news to day that the FAA shutdown will likely continue for quite some time, due to stalemate in Washington.

 

As for the deepening recession, the stock market gave me a nice reminder of THAT today! I've been getting killed lately and had hoped debt ceiling deal might turn things around. Poor economic news did just the opposite!

[philobert]

I heard on the news to day that the FAA shutdown will likely continue for quite some time, due to stalemate in Washington.

 

As for the deepening recession, the stock market gave me a nice reminder of THAT today! I've been getting killed lately and had hoped debt ceiling deal might turn things around. Poor economic news did just the opposite!

 

 

Not a stalemate. it's time for the summer 5 week recess if you can believe that nonsense. they won't get to it, until they get back to it.

 

crazy stuff.

 

cheers

 

bert