"Have you no shame?" Airlines Raise Prices, Owe Consumers an Apology, Peanuts and a Few Bucks

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28 July 2011

It looked like consumers might finally be getting a break this summer.  Not from the record heat, but rather from some of those mysterious fees, taxes and surcharges that are added to every airline ticket.  Last week, Congress failed to pass a bill that would continue an array of taxes tacked on to every airfare.  Yes, taxes can go away.  The:

  • 7.5% excise tax on all domestic tickets;
  • $3.70 tax on each flight segment; and
  • $16.30 tax on international flights

-- all are history for now.  How much money is that?  The New York Times reports that the total tax per ticket averaged about $61, or a total of $25 million per day.  So, are consumers the big winners following Congressional inaction?  Nope.

First they took away meals on most flights, next it was those peanuts and pretzels in tiny foil packets.  Now it’s the tax savings.  Rather than cutting prices, the airlines simply added a like amount to everyone’s fare.  Scoundrels aren’t they?  Cynically, airline industry spokeswoman Jean Medina claims consumers’ costs have not increased.  She cleverly avoids the fact (as most spokesmen do) that the airlines have manipulated for themselves a windfall.  Same plane, same crew, same can of soda, just pay me $61 more.  Its outrageous and at a minimum the Department of Justice’s antitrust division should issue some subpoenas to investigate how so many airlines acted in concert to raise prices.  (“Ms. Medina, you are under oath…”)

Our hats are off to the few airlines doing the right thing and passing savings along to consumers: Spirit Airlines, Alaska Airlines, and Hawaiian Airlines (yes, that’s all of them).  But shame on all the other airlines; at a minimum they should throw us some peanuts.  And let’s hope those hard-working civil servants at the Department of Justice have some time to investigate the conduct of an industry that seems to perpetually place consumers at the back of the line.

Steven Berk, assisted by Zach Kady
Berk Law PLLC