Effect of 2003 Security-Fee Holiday
 

Today, President Bush signed into law the war-related supplemental appropriations bill, which includes roughly $3 billion in financial assistance to the airlines. One provision of this bill suspends collection of the 9/11 security fee (up to $10 per itinerary) through September 30, 2003. (The starting date is either April 1 or June 1. I haven't been able to determine which date is in the version the president signed.)

The airlines have been imposing this fee on award tickets. Will they still collect it during the "holiday"? Does anybody have any information on this?

Bruce

airline folks have been saying that the public has a limit on what it will pay & that these fees, come from what they could charge.. don't expect to see a reduction.

The security fees did not increase the gross amount that fliers were willing to pay; therefore these fees came out of the hide of the carriers. In fact the gross prices I paid last week for a bunch of Southwest tickets, all the new fees included, were the lowest I have paid in over 4 years.

A fee holiday will go and should go to the carriers as they increase the net price to keep the gross price the same. Look for plenty of articles by economic illiterates complaining that the airlines are gouging passengers.

What about award travel? I expect that I should get a refund for the fees collected on these tickets?

I agree with the posts about not reducing prices on "regular" tickets. But I'm asking specifically about AWARD tickets. Will the airlines continue to impose this fee, when it is not payable to the government? Seems like a pretty good question. I asked United, but they don't have an answer yet.

Bruce

Ticketed 2 AA award itineraries, F to Hawaii, earlier this week and was charged $10 per ticket. Next day heard announcement of holiday. I'll try to check effective date and post here. If it's 4/1, sounds like AA will have to refund.

If the government isn't collecting the fee from the airlines, the airlines should not be allowed to charge it SEPARATELY to the passengers. That's like trying to charge sales tax to your walk-in customers if you're a store in a state that doesn't have a sales tax.

Airlines have captured savings before from tax holidays (like the temporary ticket-tax expiration a few years ago) when taxes were in the BASE fare. But because this is an add-on charge, it should not be passed on during the tax holiday.

If airlines want to try to raise the base fare by the amount lowered in the security charge, then fine. I think competitive pressures can take care of that.

From the flyer's perspective, the fewer the add-ons, the better.

[This message has been edited by RustyC (edited 04-17-2003).]

Did not know this was in the bill. I have four award tickets upcoming, $40. Since the money goes to the govt, I want it back.

Its fraudulent of them to collect such a "tax" when none is imposed by the govt. For the morals police on this board, its also unethical. For the nitpickers, it probably also violates the fine print of the FF TOS or whatever its called. However, I fully expect no refunds.

BTW, many online or catalog retailers collect sales tax even if its not due to the govt. You can be sure they do not forward such amounts to the govt unless actually required to do so.

The wording of the supplementary appropriation signed by the President, I just checked it on the DHS (Dept of Homeland Security-TSA's parent org) website indicates the govt will give back to the airlines what they collect for security charges. Sounds like I just gave AA $20 for 2 award tickets and now they'll get $20 more out of the check I just wrote IRS this week. Great! I just called AA and they say all this is news to them. They're still charging "up to" $10 in security fees for each award ticket. I need to quit my day job and go be a lobbyist for the airlines!

Im ticketing a NWA award ticket, they are still charging me the 10 fee.

Just paid $10 security charges for my DL award ticket to the Freddies. Ticketed today.

I was charged the fee 2 weeks ago for tickets in Feb. 04. Will the fee holiday apply to those tickets?

I must disagree here. While the price of tickets purchased at a later date may not decrease, those tickets purchased before the effective date of the bill for travel after the effective date should be eligible for refunds of the fee. This collected fee was paid to the airline as a pass through tax to the government. Since the gov't is no longer collecting that fee, it should be returned to the customer.

Good question about awards though. Seems like if it was already paid a refund is due.

You can bet that the same "mass tort" law firms who sucessfully filed and then settled class suits against hotel chains regarding their "energy charges", will be licking their chops over any airline's slightest misstep with this tax issue.

It's as sure as the sun will rise in the east.

Tex



[This message has been edited by Ex-Tex (edited 04-18-2003).]

Mightn't that possibly be a good thing? While I'm not in the legal profession and have no doubt that many of these lawyers are motivated by no more than visions of lots of legal fees, I nonetheless can appreciate how some of these class-actions have been an important check against abusive, overly deceptive and questionable corporate marketing practices.

To hear right-wingers tell it, all the litigation is frivolous and motivated by greed, which trial lawyers have in abundance but corporations somehow lack. Get rid of the lawsuits and the benevolent CEOs will pass on savings to consumers (rather than pad their own compensation!)

Bottom line: There's a balance of power here. While both sides have their bad actors, as a consumer it's my hope that they both box so hard they knock each other out. Class-actions are the only effective legal remedy when large numbers of people get cheated out of small amounts of money. Past cases and their deterrent effect are important protections for consumers from future abuses, even when the mechanism for distributing settlement dollars is faulty.

[This message has been edited by RustyC (edited 04-19-2003).]

I called United last night, and they STILL don't know what to do about this. And the confirmed dates for the fee "holiday" are June 1 through September 30, 2003. (I checked the Conference Report, as printed in the Congressional Record on April 12. The president signed the bill into law on April 16, but the Public Law printing is not available yet.)

When I spoke with United, the guy suggested that the holiday might apply to tickets ISSUED during that period, rather than flights taken then. I can't believe that, but obviously United has no idea what the rules are yet. Has anyone spoken with any other airline about this?

Bruce

This morning, United confirmed that the "9/11 security fee" will not be collected on tickets issued for flights during the period June 1 through September 30, 2003. Procedures should be in place later today. (This is good for me, because tomorrow I have to ticket three award itineraries for flights in July.)

United did not know yet whether travelers with tickets already issued for flights during that period can get the fee refunded. (I have two of those.) I assume the answer will be yes.

Bruce

Yes, I am fresh off the phone with a supervisor at US who disclaimed any knowledge of the security-fee holiday. She tells me that I will not get my $5 back.

I won't go to great lengths over $5, but I did promise to email her an article explaining the holiday, so if anyone has anything I can send, please post or email privately.

Interestingly, my sister used her own UA miles for an award ticket on the same flights. I wonder if she would have better luck contacting UA for her refund.

I have three awards during that period. I will definitely be asking for the "security" fees that were extorted from me.

------------------
"Give me Liberty or give me Death." - Patrick Henry

You can refer to the Congressional Record, House of Representatives, April 12, 2003, page H3369. The introductory language to Title IV of the Conference Agreement describes the fee holiday. This is available on-line, but the link is difficult to reproduce.

Bruce

Hmmm, wrong link. Will keep looking.

[This message has been edited by SMessier (edited 04-21-2003).]

could someone please post a link to this new law
Thanks http://www.flyertalk.com/forum/thumbsup.gif

I cannot imagine anyone at Delta Air Lines, who would answer the phone when you call this morning, knowing about Bush's signing, much less knowing how the company will proceed in response. The folks on the phones will have to wait for the middle management people to hustle around and fine tune their phraseology, then a flurry of paper will be passed around telling the Res people what to say and how to reply. I'd bet there has been *no* preparation for the agents to be prepared today to answer questions, nor that this issue was even forthcoming. It's always catch-up-ball at DAL.

Actually, not. Congress is the entity that decided the new security fee would apply to award travel, even though all other domestic taxes and fees (including the optional airport PFC) do not.

OK, here's the relevant page in the Congressional Record.

Also, I heard from United today by e-mail. They acknowledge the change in law but haven't decided if the holiday applies to tickets purchased or flights taken during that period. The airline trade association is seeking clarification from the government. A very good answer!

Bruce

Here is another link to the legislation.

http://frwebgate3.access.gpo.gov/cgi...ction=retrieve

As far as the detterent effect you might be correct but the criticism of the lawyers involved in these class actions is warranted. The only one profiting from these class action suits are the lawyers not the consumers. Have you saved any money with the $10 coupon from the enrge charge settlement? They aren't valid on most rates. It's a bigger scam than the original surcharge was. The lawyers don't care they got their cut.

I continue to buy tickets for the period June 1 through September 30, 2003, with the "9/11 security fee" included in the price. The general thinking at United right now is that the language in the legislation (see above link) applies to tickets purchased during that period, NOT flights taken then. The airline trade association continues to seek clarification of this important point from the government.

Bruce

The word I got when calling NWA is that this applies to tickets BOUGHT during the June 1 ~ Sept 30 time frame.

I redeemed a domestic AA award with 2 legs in May and 4 legs in June and was charged $5 : Looks like AA is charging based on time of travel rather than when I bought (in April).

I got the same message yesterday from AA when I went to ticket an award reservation for early July: the security fee holiday applies only to tickets purchased between June 1 and Sept. 30 of this year.

All of the airlines are now raising the cost of all round-trip tickets $10.00 for travel starting June 1. This will offset the reduction of the $10 security fee.

I noticed the $10 increase thing on Delta's site this AM.

It sounds like a good plan to save a few bucks would be to cash in FF miles for tickets in June, thus having them ticketed in the holiday, and avoiding the fee. Then use them sometime in the next year.

Also related to the fee, I noticed that they didn't charge the security fee on my 'bump' voucher. Would the airline pay this fee, or do they just justify that bumped passengers have already gone through security, so don't need to be double-taxed. http://www.flyertalk.com/forum/smile.gif

Airlines would have loved it if they could have raised fares to mask this tax holiday like they did a few years ago when the ticket tax expired temporarily. In that case they collected more money without appearing to raise fares.

But this tax is an above-the-line add-on, not included in the fare they advertise in the paper or on the Websites. So airlines really do have to raise the fare to try to capture it, and I don't think that will work. An AirTran or Southwest or JetBlue could try to embarrass them and get the fares back down to the earlier equilibrium. Whatever increase they're doing now will be erased in the next round of sales.

On page 1 of today's Wall Street Journal it said, "Airlines will raise round-trip fares $10 on June 1, when the federal security fee is suspended."

The detailed article said this was first announced by AA and then quickly matched by UA, CO, DL, NW, and USair. No mention of discount carriers, like SouthWest.

I read an article this morning that said the government was investigating the $10 fare increase...they suspect the airlines of breaking their agreement not to use collusion (i don't think that is the word they used!!, but I can't find the paper)

If I find article I will edit this and use correct wording.

Interesting subject. Checked the tsa.gov web site and found the legislation at 49 USC 40101, et seq. The "fee" in particular is set forth at 49 USC 44940. Could not find any reference on the dhs.gov site to the government refunding the fee to the airlines. If anyone has that cite would appreciate hearing.

Just like the airline excise tax this fee is payable by the airline but collectable from the passenger and it is collected upon sale but accrues upon transportation. The fee is $2.50/segment NTE $5.00/one way. Therefore the maximum fee is $10.00/round trip. This does not mean every trip is assessed $10.00 but rather the maximum fee is $10.00.

In any event, I paid AA this fee for travel after June 1/before September 30 and they refuse to refund it. If the fee is refundable to the airline then it is almost identical to the airline excise tax debacle several years ago; the airlines pocketed the tax and the consumer had no means of recovering it because: a) the airline was immune from suit as the Government's tax collector; and, b) the consumer had no procedural means of recovering the tax since he/she did not file excise tax returns.

In any event there is a toll free telephone number to contact the tsa if anyone is interested - (866) 289-9673. Good luck!

Any official updates on this as far as getting the money back? Airtran states "Thank you for taking the time to write with your inquiry. Unfortunately, any reservations made prior to June 1, 2003 for travel between the dates of
June 1 and September 30, there is not a refund. The "September 11 Security fee" is applied at the time of purchase, therefore the fees associated with the tax has been forwarded to the government."