Airline “Tax Holiday” Update

(Via Farecompare)

It looks like most airlines are now using the expiration of several government-mandated airline taxes to raise fares rather than pass the savings on to consumers. As of Monday morning, only Virgin America, Alaska and (as far as I can tell) Spirit have not increased fares to compensate for the taxes they no longer need to charge (roughly 7.5%, though US Airways has apparently only raised about $8). Virgin America could conceivably hold out for a while and use it as a marketing tool (a la Southwest and their lack of checked baggage charges), but I don’t see how Alaska keeps their fares lower.

JP Morgan airline analyst Jamie Baker says that airlines could take in $25 million a day by raising fares to make up for the difference. Who would be crazy enough to leave that on the table?


  1. “Who would be crazy enough to leave that on the table?”

    Um, Congress?