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Air Fare Pricing

I recently booked an international flight. The cost breakdown on the confirmation shows the fare is 20% of the total price, and taxes are the other 80% (broken down further into 12 categories). How can that be?

Posted by
19119 posts

Do you really need to be told? This is just one of the many benefits of the free market system. I expect that under taxes they include the income tax of the CEO (that won't be very much) and the sales tax on everything the airline buys, down to pencils. The object is to offload every possible expense as tax so they can mislead you into thinking that you are not really paying very much for the flight, and the awful government is making it high.

Posted by
120 posts

Did some checking on the various codes and found the largest charge listed as taxes was a fuel surcharge. The rest were government taxes and fees. That made it 72% to the airline and 28% to the various governments which makes more sense. Creative accounting for sure.

Posted by
3580 posts

Some airlines' websites are more transparent in their pricing than others. I always check the final total ticket price before I pay for a ticket. Those "doorbuster" prices listed for some of the discount flights represent only the basic price before all the other fees.

Posted by
7591 posts

Fuel is a bigger cost than most think for International flights. I should go back and find the info, but I had found a website that broke down fuel usage per passenger for different aircraft. By my calculations a trip across the pond meant using a 55 Gal drum of fuel just for me.

Posted by
977 posts

We paid for our return tickets today Adelaide/Singapore/Amsterdam Zurich/Singapore/Adelaide Total Cost: $3774.78. Ticket Cost $1158.00 per person Taxes: Australian Departure Tax for 2 $94.00 Safety & Security Charge for 2 $11.14 Passenger Service Charge for 2 $35.74 Global Insurance Levy!!!! for 2 $1125.00 Singapore Tax for 2 $63.80 Switzerland Tax for 2 $93.20 We were told The Global Insurance Levy of $562.60 pp is virtually a terrorism charge in case the plane gets blown up!!!
This will be my fifth trip to Europe. My first being in 1995. This air fare is the cheapest out of all five!!!??

Posted by
120 posts

This British Airways site gives codes and costs for some of the ticket charges: http://www.britishairways.com/travel/lcinfo/public/en_in An interesting one is levied in France, a Solidarity Tax (code IZ). Its purpose? An international facility for the purchase of drugs against HIV/AIDS, Malaria and Tuberculosis. It was founded in September 2006 on the initiative of Brazil and France, and is to a great part financed by so called innovative development financing mechanisms, namely a solidarity levy on air line tickets.
Wow, an "innovated development financing mechanism".

Posted by
146 posts

Gary, we too, just booked an international flight for March.
Ticket price was $204.00 + $339.00 for taxes. Seems a little extreme, no? Total was $543.00. Got a break for online booking, and plugging in a code found on PromotionalCode.com. Saved $30.00 more. And Judy, I just read up on the Australian Global Levy tax. Wow, what a rip-off! Australia is the only country that applies this tax on all inbound and outbound airlines/passengers. Your tourism lobby, (TTF Australia), states that this is just KILLING tourism to the Land of Oz. It applies to any airline company, no matter if the plane is owned or fully insured in another country. The airlines are forced to pass it onto the passengers. I noticed it does not apply to cruise ships, though. $562.60 AUS per person tax, is more than we paid for our entire round trip tickets. I guess that's the price you pay to live in a great beach town. And you can always have Camillo cook you something up at Assaggio's.

Posted by
1064 posts

I suspect that Lee is right. The airlines are simply playing accounting games, using the government as a convenient scapegoat for the cost of doing business. That is a marketing ploy that is dishonest but is becoming so widespread in our culture that most of us take it for granted these days. I do not believe for a minute that the airlines would offer the flights at the initial posted price if there were absolutely no taxes? The total price is what it is, and we either pay it or walk away, literally.

Posted by
23361 posts

The pricing strategies are solely driven by the internet travel search engines. The search engines (Kayak, Obritz, etc.) ONLY consider the base fare price when listing fares. The typical user wants to only see the cheapest fare. And it is extremely critical for the airline to be listed on the first page because the user seldom looks beyond the first page. (All supported by market research.) How many times have you observed the results of a search and the first airline listed is not the cheapest when all the fees were added in? If the search engines would change their searching techniques to list the airlines by the lowest total price, some of the gaming of fees would be reduced since it would not have any impact on the final listing. Does anyone really not recognize that base fare has no meaning?

Posted by
12172 posts

I was surprised to read in the article about American Airlines bankruptcy that airline fuel is at a record level, even more expensive than when oil was at $147 a barrel. Governments everywhere at federal, state and local levels are trying to find more revenue. Taxing travelers is often more palatable than raising taxes on your own constituents. Among other taxes, gate and security fees are going up. I'm not sure those will ever go back down.