Calling it a "theft of consumer confidence," Congresswoman Mary Bono Mack (CA-45), Chairman of the House Subcommittee on Commerce, Manufacturing and Trade, sent letters today to the major airlines serving Palm Springs, criticizing their decision to "essentially pocket the federal ticket taxes paid by the traveling public." Bono Mack said the timing of recent fare hikes raises the issue of "profiteering" by airlines. Letters were sent to American, United, Delta and US Airways.
July 27, 2011
Mr. Doug Parker, CEO
4000 East Sky Harbor Boulevard
Phoenix, AZ 85034
Dear Mr. Parker,
The ill-advised decision by US Airways to essentially pocket the federal ticket taxes paid by the traveling public brings new meaning to the phrase, "the sky is the limit." While this action may not be illegal, it's certainly a theft of consumer trust. I strongly urge you to reverse this new policy and issue refunds to passengers or place the money into the trust fund that pays for airport improvement projects.
As Chairman of the House Subcommittee on Commerce, Manufacturing and Trade, I believe your decision raises a number of relevant oversight issues. Most notably, how is it that nearly all of the major airlines inexplicably raised fares by approximately 7.5 percent the day after the federal taxes expired? Was it simply a coincidence? I hardly think so, especially when a spokesman for the Air Transport Association reassured Americans that they "would not be paying more than they planned" for an airplane ticket. That's hardly the point. Consumers today should be paying less for a ticket without the relevant federal taxes being collected.
The decision to hike ticket prices amounts to a $30 million a day windfall for airlines and raises the ugly issue of profiteering on the impasse over the Federal Aviation Administration (FAA) authorization legislation. While I have been sympathetic to the airline industry's ongoing struggles to meet higher and higher fuel costs, this back door grab for money is simply unconscionable.
Give consumers a break, or -- at the very least -- put the money, estimated to be $200 million a week, into the Airport and Airway Trust Fund (AATF), which benefits airlines as well as airports. This issue strikes a nerve with me because a much-needed new air traffic control tower at Palm Springs International Airport depends on federal funding. It's one of 172 projects around the nation where stop-work orders have been issued, forcing all of them to grind to a halt.
In closing, I again urge you to do the right thing. For a weary public, tired of paying extra for bags, pillows and food, please don't try to cram federal taxes into the overhead bins, too.
MARY BONO MACK
Member of Congress