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FAA can't tax plane tickets, some airlines to offer lower prices for consumers

July 26, 2011

The U.S. Federal Aviation Administration's (FAA) operating authority ended on Friday because members of Congress were unable to agree on terms for an extension. The impasse was a result of a $16.5 million subsidy cut that House Republicans wanted, but Senate Democrats refused to accept, USA Today reports.

One major result of Congress's indecision is that the FAA is no longer able to impose ticket taxes, which have provided the organization with about $200 million per week to fund its projects.

Many air transportation companies are taking advantage of the situation by raising their ticket prices to be about the same price as they would be with taxes, except all of the money is now going directly to the airlines, The New York Times reports.

"The consumer should have saved anywhere from $25 to $50 round trip," Rick Seaney, the CEO of FareCompare.com, told the news source. "Instead, it’s a windfall for the airlines."

However, some companies - such as Spirit Airlines and Alaska Airlines - are passing the savings onto their customers.

Business travelers and other frequent fliers should keep this in mind when booking their next trips to try to save money on travel expenses. They can also consider buying calling cards to save money on long-distance and overseas calls while they are traveling.

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