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UPDATED: FAA Taxes Go Away: Which Airlines are Passing the Savings to Customers?

As of midnight last night, part of the FAA shut down due to fun politics. Part of the shutdown was not having the ability to renew FAA taxes on airline ticket sales. Some airlines are taking advantage of this and offering lower fares, others are using this as a chance to earn a little extra dough.

It makes sense for airlines to go both directions. One is really just your classic sale promotion and using the timing of the taxes. For the others, I would assume that most consumers do not understand that there are no taxes and are not aware that even though the taxes are removed, most airlines have just raised fares to compensate.

UPDATE 1: I have confirmed that Spirit Airlines is passing the savings on to customers. I have heard rumors that Frontier is as well, but waiting to confirm.

UPDATE 2: Hawaiian Airlines is also sharing the love with customers.

UPDATE 3 (7/24 2pm PDT): Frontier Airlines is also sharing the love. American and JetBlue have raised their fares.

UPDATE 4 (7/25 7:45am PDT): It looks like some airlines might have had a change of heart. Working to confirm, but appears that Virgin America and Frontier might have stopped passing on their savings and have raised fares. For now I am changing Virgin America and Frontier to “unknown.” Also checking in with Alaska, Spirit and Hawaiian to see their thoughts.

UPDATE 5 (7/25 8:55am PDT): Spirit Airlines has confirmed they are still offering lower fares. Virgin America has raised some of their fares, but not all of them.

Currently Alaska Airlines and Virgin America are the only two passing the FAA tax savings to customers.

Currently, only a few airlines are passing the FAA tax savings to customers.

I am trying to talk directly to US airlines through out the day and will be updating. I am hearing somethings from reliable sources, others are more like rumors and I am being sure to indicate each:

ALASKA AIRLINES- Sharing the Love
Alaska Airlines is advertising on their main page that they are having cheaper prices due to no FAA taxes. A spokesperson with Alaska explained via email, “We’re not raising fares.  We’ll continue to pass the savings on to customers.”

SPIRIT AIRLINES- Sharing the Love
I have confirmed directly with Spirit that they are passing down the savings and have no plans to stop.

As of 6:30pm PST on 7/24 there is no information about their “Spirit Airlines is Giving Customers Their Share of $200 Million Per Week in Tax Savings!” deal on their webpage, but an email was sent out to their VIP customers (thanks John B for sharing). In the email they state, “Spirit has become a model for transparency, ensuring customers are not impacted by hidden fees as practiced by other airlines and the government.”

HAWAIIAN AIRLINES- Sharing the Love
Hawaiian Airlines is promoting saving money via the FAA Taxes on Twitter: “Some major federal taxes on airline tickets have taken the weekend off. BOOK NOW.”

VIRGIN AMERICA- Sharing Some of the Love
Over the weekend, Virgin America ran a special “Evade Taxes. Take Flight,” campaign, but now the website is changed. As of 10:40pm last night they were advertising fares with lower federal taxes. As of Monday morning, they have raised some of their fares. “Yes, we were automatically passing on the equivalent discount (down to the decimal) across the board through the weekend – and encouraging guests to grab the discount early,” Abby Lunardini with Virgin America Communications explained over email.  But, given the dynamic nature of fares, with the Monday morning fare load – some fares have changed and/or moved up, but some of the discounts have held.”

FRONTIER AIRLINES- Unknown
As of Monday morning I am hearing rumors that Frontier has raised their prices. Emails, calls and messages sent via Twitter have not yet been returned to confirm.

DELTA AIR LINES- Keeping the Money
It seemed earlier in the day that Delta was going to share the love, but it has been decided to raise fares.

SOUTHWEST AND AIRTRAN- Keeping the Money
“Southwest and AirTran implemented a system wide fare increase of $4 each-way to help offset industry cost pressures – such as the rising expense of fuel,” Brad Hawkins with Southwest Communications explained over email.  “Our current ticket prices will remain the same (Customers will not see an increase in fares), as the 7.5% excise tax will not be collected. These decisions were made in light of the recent industry change in aviation tax collections, and we made a business decisions to remain competitive in these economically challenging times.”

UNITED AIRLINES- Keeping the Money
United has decided to match the taxes and have increased fares.

AMERICAN AIRLINES- Keeping the Money
According to the LA Times, American Airlines and JetBlue have raised their fares and are keeping the extra FAA tax money. “So in effect the taxes are not being collected, but the price paid by the customer remains the same,” American’s Tim Smith told the LA Times.

JETBLUE- Keeping the Money
JetBlue has decided to raise fairs and a spokesperson told AirlineReporter.com, “We’re working with the Federal Government to determine how the recent expiration of the Federal Excise Tax, and other taxes, will impact our operation. We have participated in an industry-wide fare increase in order to remain competitive.”

 

18 comments to UPDATED: FAA Taxes Go Away: Which Airlines are Passing the Savings to Customers?

  • Acgenerator

    I don’t think American is keeping at least not on the flights i checked. they put taxes on after the advertised price.

    I purchased a ticket to mia at 181.40 on june 26. taxes/fee/charges were 32.56 bucket “o”
    same ticket today (the fare is higher than the sale i got) has 14 flat on taxes/fees/charges on a much higher price ticket.

    Same goes for several flights i’ve been watching. Caribbean/Mexico taxes/fees/charges are 30-60 rather than the typical 100.

  • [...] FAA Taxes Go Away: Which Airlines are Passing the Savings to Customers? [...]

  • Frontier looks to be hlolding the line with not increasing fares in light of the tax holiday. Fares that were $80 are now $71.19 or so, though sometime today some fares became absurdly expensive for no reason that I can figure out (try DEN-SAT in mid-October…$200 OW instead of a little over $70).

  • cook

    Hmm! This windfall will be short-lived and the feds will be back at their tax collections in short order. For the airlines, the minor adjustments are (mostly) simple software changes that cost them little to implement. Those lines that are Sharing the Love are to be commended. Those who are Keeping the Money *May* be in for a rough ride. Calling it a fare increase is one thing, but collecting the money as a tax and then pocketing it, rather than forwarding the funds to Uncle Sam, may well be a serious violation of something. If nothing else, it is a scumbag, opportunistic policy. That United and Delta are among those Keeping the Money does not surprise me. -C.

  • [...] being paid in tax. All of the bigger airlines are doing this, including Southwest and JetBlue. (Airline Reporter is keeping tabs on this in [...]

  • Looks like VX and F9 are raising fares because they tend to just match WN dollar-for-dollar. From what I’ve seen SWA in some instances is not modifying fares, so due to the lack of a segment fee prices are going down by ~$4 overall, but since their advertised fares include the excise tax it’s an in-effect fare increase (but not a price increase) for them.

    Example: DEN-SAT was ~$80 for offpeak on WN and F9. When taxes got turned off, WN went up to $80 and F9 went down to $71.19. WN then decided to go down to $76. Frontier matched that price last night.

  • Why do you keep saying “PST”? We won’t have Pacific Standard Time until early November. It’s PDT right now.

  • So much for airlines complaining about taxes deterring customers from flying. Although, I can see the potential of customers complaining if airlines lower the prices and then suddenly raise them again when the taxes come back. They may not want customers to get used to the good deals.

  • Marion

    Hi I booked 7 return flights to Orlando from Scotland after the shut down and I have been charged US taxes that is with BA and cant get then on the phone

  • T R

    Unbelievable. Brash, in your face. disrespectful to traveling public, do not fly Frontier airlines. A racquet, FAA tax scam. Painless politician’s. Vote with your feet. Vote all incumbents out. Return to true representation in Washington.

  • Freda Rutherford

    My United ticket purchase clearly $184.00 as taxes and fees. I have disputed this charge and they are sending me their canned message, which states that the taxes were not in effect at the time of my ticket purchase. What now?

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