FlyerTalk Forums - View Single Post - Adjustments to base fares so the all-inclusive price hits some pre-determined total?
Old Sep 21, 2008 | 12:32 am
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Nevada1K
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Perhaps the non-intuitive aspect stems from the fact that only the Federal Excise Tax is a percentage of the base fare. All the other taxes and fees (segment fee, PFC and 9/11) are fixed amounts irrespective of the base fare.

The published fare (the fare that shows on the select flights page with the radio buttons) consists of the base fare and the 7.5% Federal Excise Tax (FET):

Outbound flight $59: base fare ($54.88) + FET ($4.12) = $59.00
Return flight at $99: base fare ($92.09) + FET ($6.91) = $99.00

To the published fare you add the segment fee ($3.50), plus the applicable PFC and the 9/11 security tax to get the final cost of the ticket.

The "fixed tax schedule" you refer to which is displayed as "US tax" consists of the FET plus the segment fee, currently $3.50, resulting in the $7.62 and $10.41 amounts in your illustration. If I'm not mistaken, the segment fee increases by $0.10 on 1/1/2009.

It has been my experience that all airlines use this methodology for their tickets because when the first "junk fee" (the Passenger Facility Charge) was authorized to be added to the price of an airline ticket, the applicable law specified the Federal Excise tax did not apply to the PFC. Similarily, when they were created, the segment fee and 9/11 fee were designated as add ons not subject to FET.

Last edited by Nevada1K; Sep 21, 2008 at 12:38 am
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