The temporary ticket tax returns

The September 11 airline security tax was temporarily lifted on June 1, but it’s coming back October 1.

Much of the analysis of the tax focuses on the ‘failure’ of airlines to pass the savings on to consumers, missing the point that consumers are willing to pay a certain price (and as anyone who studies airline pricing knows, that price varies under lots of conditions) for their travel. Adding a tax doesn’t make them willing to pay more, and removing a tax doesn’t mean travel is worth less to them.

So no one should be surprised that prices don’t move in lock step with taxation. But one should always be skeptical of articles that talk about average ticket prices, or even worse ones that make a claim (as the previously linked article does) that when the tax was lifted,

    rather than passing the savings onto customers, the major airlines increased fares by $5 each way so the industry could reap the benefits of the tax break.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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