Airlines Oppose New Government Airport Fees, but So Should Travelers

Last Updated May 24, 2010 3:23 PM EDT

Plenty of people, including my BNET Travel colleague Barbara Hernandez, are talking about the hypocrisy coming from airlines when they criticize government fees while adding their own. It's an easy accusation to make since on the surface, it looks like the airlines support their own fees while they oppose those coming from anyone else.

It's not that simple. In fact, by opposing government fees, the airlines are doing a favor for travelers.

Just because the two types of charges are called "fees" doesn't mean they're the same thing. With airline fees, the idea is (with very few exceptions) to charge a base fare and then give people the option of paying for what is ultimately an optional item. You want food? That's not necessary to get to your destination, so it's extra. Same with baggage. It's not so much a fee as a change in the way airlines price.

From the government's side, fees are not optional. Fees are really additional taxes slapped on to airline tickets in order to fund projects. They are talking about everything from raising the cap on airport-imposed passenger facility charges from $4.50 to $7.00 to instituting a fee for funding the "NextGen" air traffic control system. There are actually quite a large number of fees being discussed that would place a tremendous burden on the world of air travel.

Some seem to be happy to put this burden on the industry. They say, after all, that since airlines are adding fees, they can surely afford to fund these improvements, right? Have you seen their income statements lately?

Airlines are altering their fare structures as fast as they can just to try to stay above water. The industry has lost a shockingly large amount of money over the last few years, and the threat of oil going even higher in the next few years is ominous. There are no massive profits in this industry.

Besides, air travel is already taxed at a higher rate than nearly anything else. For example, while the airlines may charge $123.40 for a very simple roundtrip from Long Beach to Phoenix, nearly a quarter of that go to airports or the government for taxes and fees (actually 23.1 percent). When you start adding multiple connections and international travel, the taxes skyrocket.

But here's the real issue. When the government adds fees, they aren't taxing the airlines. Anything that the airlines pay for ultimately has to be passed through to the travelers. So an additional government fee is a fee for travelers, and it's not an optional one.

Let's say that the passenger facility charge cap goes up from $4.50 to $7. That right there makes your Long Beach to Phoenix ticket $128.40. Throw in a few of the other fees you're talking about and you'll be well over $130. The airlines will get only two-thirds of what you pay.

The worst part? Maybe at $123.40 there is enough demand to keep the flight going. But what if it's up another $10? Demand will drop, and that flight may no longer be profitable. Instead of having to contend with higher fares, travelers will simply lose the flight as an option completely. This has happened to marginal routes in the past and it's likely to happen again.

So when the airlines are fighting government fees despite adding their own, they aren't being hypocritical. They're really trying to stay afloat and to keep as many people flying as possible.

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