In case you were not aware, the TSA fee built into every ticket purchase will go up on 21 Jul 2014 for all tickets bought after that date.  The existing fee is $2.50 a segment with a max of $10 for one RT ticket.  Now the new plan is for a flat $5.60 each way, meaning $11.20 for a RT flight.  Note that more than four hours between stops will count as a new flight and thus a new fee.

Since the fee has not been raised since it was imposed in 2002, this raise does not seem unfair, however, there is more to the story.  You see Congress actually increased the fee to $5.60 which was more than the $5.00 per trip that the TSA actually requested.  More importantly, the majority of the money raised from this new fee will not go to the TSA!  This raise in fees is estimated to collect $332 million next year, but $200 million of that is designated to go into the general revenue fund with only the smaller amount going to TSA.  Congress is sneakily trying to raise tax revenue to lower the deficit by taxing flyers.

Not only is TSA not getting most of the fee, but they are actually planning ways to reduce staff and cost over time.  I am sure most people will hear about the fee increase and get angry (or angrier) at the TSA when it is really Congress’ fault and TSA will just bear the brunt.

Just as we often see with travelers having to pay higher than normal taxes for hotels and rental cars, they are now eyeing ways to soak the flyer.  Congress is not the only one with their sights set on this new revenue stream.  The facility fee charged to each ticket by the airport is set to almost double its current limit of $4.50 and Customs and Border Protection wants to raise the immigration fee from $7 to $9.  Scott McCartney, from the Wall Street Journal, says that there are as many as 11 different taxes and fees on an airline ticket so that 27% of a typical tickets price is now taxes and fees.  This “death by a thousand cuts” method has worked well with the hotels and especially rental cars.  Have you looked at all the fees on a recent rental?  Or a phone bill for that matter.  Having a huge amount of small fees makes it really hard to single a particular one out and complain about it.  I doubt that it will go anywhere but up given the current trends.

Airlines are stuck with advertising the entire price of the ticket due to legislation that started about two years ago.  Thus, they would like the traveler to be hit some other way than adding on taxes to the ticket which they then have to advertise.  Expect the airlines to be pushing hard for some other way for the government to get it money.

Posted by glenn | No Comments

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