"Airlines Use FAA Shutdown As Excuse To Hike Up Ticket Prices"
As ThinkProgress has been reporting, congressional Republicans forced the Federal Aviation Administration to partially shut down over the weekend over a series of anti-union demands. The FAA has been reauthorized without controversy more than 20 times, but this time, House Republicans insisted on including a provision that would make it harder for airline workers to join a union. The shutdown resulted in 4,000 employees being immediately furloughed, halted $2.5 billion in airport construction projects, and is costing the government about $200 million a week — or $61 per airline ticket.
But the shutdown has been good for some parties — namely, the airlines:
Airlines are tossing consumers aside and grabbing the benefit of lower federal taxes on travel tickets.
By Saturday night, nearly all the major U.S. airlines had raised fares to offset taxes that expired the night before.
That means instead of passing along the savings, the airlines are pocketing the money while customers pay the same amount as before.
American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue all raised fares, although details sometimes differed. Most of the increases were around 7.5 percent.
By all accounts, the shutdown should have lowered ticket prices for consumers since the travel tax temporarily expired and airlines no longer have to give part of the money they collect to the government. Instead, airlines have used the shutdown as an excuse to raise prices. Airlines like US Airways that have hiked up prices declined to say whether prices will go back down if Congress revives the travel taxes.
A few airlines are passing the tax break on to consumers, including Virgin America, Frontier Airlines, and Alaska Airlines.