Two senators wrote to Richard Anderson, CEO of Delta Air Lines and chairman of the Air Transport Association. The letter addresses the ticket taxes which airlines are still collecting even though the partial shutdown means the government is not collecting that money.
“Although this policy may increase your bottom line in the short term, we are afraid it will have long-term repercussions for the industry,” wrote Senator Jay Rockefeller, chair of the Transportation Committee, and Senator Maria Cantwell, chair of the Aviation Subcommittee. “We urge the nation’s airlines to put all of the profits that they are making from the lapse of the aviation taxes into an escrow account so they can be transferred back into the AATF (Airport and Airway Trust Fund) when Congress reinstates the taxes. We have heard from airlines for many years, these fees, all of which are passed onto the consumer, depress the demand for air travel,” the senators wrote. “We are left to conclude that your previous assertions were incorrect about the impact of taxes and fees on the industry.”
The US government is not currently collecting a 7.5% sales tax on US air tickets and a 7.5% sales tax on the purchase of frequent flyer miles. Taxes on jet fuel are also reduced. During this lapse the US government is losing $200m in tax revenues per week.
