Global Airport News
Airlines should not "pocket" revenue from a passenger tax that has lapsed during a partial aviation shutdown, two transportation leaders in the US Senate said in a letter sent to the industry association on Tuesday.
"Although this policy may increase your bottom line in the short term, we are afraid it will have long-term repercussions for the industry," wrote Senator Jay Rockefeller, chair of the Transportation Committee, and Senator Maria Cantwell, chair of the Aviation Subcommittee.
"We urge the nation's airlines to put all of the profits that they are making from the lapse of the aviation taxes into an escrow account so they can be transferred back into the AATF (Airport and Airway Trust Fund) when Congress reinstates the taxes," they added in the letter to Richard Anderson, chief executive of Delta Air Lines and the chairman of the Air Transport Association.
Many US airlines have quietly raised fares in recent days to take advantage of a lapse in tax collection after Congress failed last week to fully fund the Federal Aviation Administration budget.
The US government is not currently collecting a 7.5 percent sales tax on US air tickets and a 7.5 percent sales tax on the purchase of air miles. Taxes on jet fuel are also reduced.
During the lapse, the US government will forego USD$200 million in tax revenues a week, which it uses for airport construction projects.
ATA has said that the additional revenue helps airlines cover costs and make investments.
"We have heard from airlines for many years, these fees, all of which are passed onto the consumer, depress the demand for air travel," the senators wrote. "We are left to conclude that your previous assertions were incorrect about the impact of taxes and fees on the industry."
