Airlines squander Capitol Hill lobbying capital by pocketing FAA taxes

Congress is aghast at the display of airline greed. I have just spent two whirlwind days on Capitol Hill and the Congress, both sides of the Hill and from both parties, is surprised at the airlines’ avaricious and rapacious response to the ending of the FAA taxation authority.

No sooner had the FAA’s taxing authority expired at midnight on Friday night that most of the airlines pounced on these taxes as their just plunder. Southwest took the additional step of announcing a $4 per segment price increase to make up for the soon-to-be uncollectable domestic segment surcharge.

Rarely has an industry moved so quickly to squander any argument that they are interested in their passengers and that federal taxes were too high. In this case, actions clearly speak louder than words. The most conservative Republican Representatives and liberal Democratic Senators are mystified at this open and unambiguous display of greed at the taxpayers’ expense.

Over the weekend I received emails from various staffers for Senators and Representatives for help in drafting letters to the airlines and their association. Today, the Chairman of the Senate Commerce Committee and the Chairwoman of the Aviation Subcommittee let the airlines have it with a letter to Delta’s CEO and Director of the Air Transport Association.

It is hard to believe that the normally astute airlines would be so blinded by the promise of additional revenue that they would squander relationships that they have built over the years in Washington. But, it happened over this past weekend.

Ironically, Delta Airlines was the last major airline to engage in this profiteering.

Here is the text of the letter sent from Senate Commerce Committee Chairman Rockerfeller (D-WV) and the Aviation Subcommittee Chairwoman Maria Cantwall (D-WA). It isn’t pretty of you are an airline government affairs person or an airline CEO.

Just as the overnight tarmac-delay incident in Rochester, Minnesota, finally spawned the current 3-hour tarmac delay rules promulgated by the Department of Transportation, this illgotten tax windfall may spell the
end to the airlines’ ability to hold back tougher consumer-friendly legislation and regulation that will force airlines to disclose their ancillary fees so that passengers can compare prices across airlines (including airline fees).

In my discussions with almost a dozen staffers over the past two days, I can see that the time is ripe. They all shook their heads in disbelief at the airline actions and admitted that no matter what the airlines said about being on the side of the passenger, it wasn’t true. Some, especially ardent airline defenders, seemed shell-shocked.

Kudos, by the way, to Spirit Airlines, Virgin America and Frontier Air Lines who are allowing passengers to save the taxes of up to $50 per fight.

What are your thoughts? Should the airlines have grabbed the expiring taxes and claimed them for their own, or should they have allowed passengers to have a tax holiday and perhaps claim that air travel is overtaxed after the public had a chance to see airfares without the hidden taxes?

In my humble opinion, someone at the airlines goofed. I’m glad they did. Their losses over time will make this short-term tax windfall look like a pittance.