Originally Posted by
fastair
IMHO, if any airline did anything less than their version of the NCAA "death penalty", they invite the IRS into this. That would cost both the airline and rule followers far more than what some people think this costs. Giving something a sellable cash value and not immediately cracking down on the sale of them to a regulator looks like implicit endorsement, or at least passive allowance of it. What do you think the fed could make (at the consumer/airline expense) by assigning a value and taxing them.
I don't see any tax issues for UA if UA permitted e-certs to be freely bought and sold. The proceeds might affect the cert seller's gross income, but I'm confident that UA does not concern itself with its passengers' tax liabilities.
Originally Posted by
fastair
sure, there is value in not allowing sales to the airline, but I bet this pales in comparison to value if the fed thought that this was an implied permission to sales, and what that could mean to the system as it currently stands.
I disagree. Since I don't see any tax issues for UA, that leaves the only issue that UA cares about, and that's UA's gross income. Allowing passengers to sell e-certs would reduce UA's income, and no airline will permit passengers to do so. Same reason non-refundable tickets can't be sold on Stubhub.
We can debate the appropriate punishment for breaking this rule, but I don't see a problem with the "death penalty" approach that UA has taken.
Originally Posted by
fastair
Im no lawyer nor tax man, but I see anything less than the harshest rebukement, as cracking open the box a bit, the box that belongs to Pandora
I am a lawyer and while not a "tax man," I do know a bunch about federal taxes, and I don't see how sales of e-certs could affect UA's federal taxes. Other than a smart aleck answer of "if UA's income were reduced, it would lower UA's federal taxes once UA begins paying federal income taxes (after it uses all of its loss carryforwards)."
Originally Posted by
WineCountryUA
UA would have zero interest in this
-- first it is creating a monetary market value for these certs which creates a number of problems such as mentioned by fastair
-- the creating and maintaining of such a marketplace for a commission is unlikely to be of interest to UA
-- the creation of such a marketplace would likely increase the interest in travelers seeking ETC
--- and the ultimate reason --- UA depends on a high level of breakage on these ETC, that substantial number of the ETC are never used. This approach change that equation and cost UA far more than any commission / transfer fee.
I agree completely with that "ultimate reason." All airlines depend on high levels of breakage when they issue vouchers, and allowing their sale would disrupt that calculation. Now that the airlines might potentially offer up to $10k in denied boarding vouchers per passenger, policing their sale will always be profitable for UA (and other airlines).