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Air carriers pocketing $25 million per day after government

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Air carriers pocketing $25 million per day after government

Postby astherS » July 28th, 2011, 1:43 am

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Since Monday morning, the Federal Aviation Administration has been operating on a skeleton crew. This is since the government has failed to re-authorize the operating budget for the agency. Some air travelers had been looking forward to this because it means no federal taxes on tickets. As of Sunday night, however, most airlines had raised costs to negate this price drop. Frequent fliers will still need personal installment loans to get anyplace.

The FAA is gone forever

As a part of the congressional showdown about federal government funding, the FAA lost working power on Monday. There has been a debate over union rights which have held up the bill to continue the running authorities. Air traffic controllers are continuing to report to work, but 4,000 "non-essential" employees have been furloughed without pay, and 87,000 construction workers have been idled as FAA-funded projects are shut down. This shutdown also means the Federal Aviation Administration no longer has power to collect the 7.5 percent ticket tax, $3.70 takeoff tax and security fees. According to the Transportation Department, there will be lots of fees lost. It will add up to about $200 million a week most likely.

How air carriers are taking financial advantage

Some, air carriers are taking advantage of the airline tax holiday. As of Monday morning, Spirit Airlines had committed to passing the tax holidays on to consumers. Costs went up $8 at Southwest Air and AirTran while most other flight companies gave a price increase of $25 and $60 which is what the government charged already. Estimates say the airlines will rake in an additional $10 million to $28 million every day. The money is no longer being given to the government. Still, customers most likely will not notice a difference.

What this FAA shutdown means for consumers

Customers most likely will not notice the main difference in air travel without the Federal Aviation Administration for probably the most part. Air traffic controllers and the TSA will stay in operation. Your ticket costs might go down dependent upon where you are flying and which airline you fly with. You may end up flying between now and when the Federal Aviation Administration begins operations again. If this is the case, you can get a refund on taxes already paid. You need to make sure you've all your receipts on hand just in lawsuit although the Transportation Department hasn't released refund guidelines.

Information from
Wall Street Journal, Seattle Post-Intelligencer, Boston.com, Daily Kos
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