In order to advertise lower fares, American Airlines will be quoting airfares without including taxes, fees and surcharges on its web site, which will be added further into the ticket purchase process, joining a practice currently used by Southwest Airlines, US Airways, America West Airlines and JetBlue.
As these taxes and fees can represent up to 20% of a $ 300 round trip domestic fare, it is likely consumers will have a harder time to compare airfares.
Not yet matching American’s move include United Airlines, Delta Air Lines, Northwest Airlines and Continental Airlines who quote fares including all taxes and fees.
The major online travel web sites (expedia.com, travelocity.com, etc.) still include all taxes and fees in their airfare quotes, even for those airlines who do not include them on their own web sites.
The Department of Transportation (DOT) rules currently only require airlines to “prominently” mention the exclusion of taxes and fees in their advertisement, when not included. These taxes and fees need to be disclosed before the consumer buys the ticket.
Currently the federal excise tax is 7.5 percent of the ticket base price, an additional $3.20 tax and $2.50 federal security fee for every flight segment (max $10 for a round-trip)…plus airport fees of up to $4.50 per flight boarding. On a domestic round-trip itinerary with a connection, these taxes can total to as much as $40.60, plus the 7.5% tax.
International tickets are imposed the security fee and airport charges plus an additional $14 for departing passengers or $31 to arriving international passengers…plus foreign airport arrival and departure taxes.
