Airline taxes - much higher in the US?

[Barciur]

Hello

This has been something that's been really interesting to me and I can't quite get a grasp on it.

The bottom question is: why are round trip flights from US to Europe much more expensive than if you originate in Europe?

I was looking at a sample BA flight from JFK to Amsterdam to JFK. The price was:

Travelers Adult Total
Base Fare $499.49 $499.49
Tax $665.58 $665.58
Total $1,165.07 $1,165.07

If you look at a sample price from Amsterdam to JFK to Amsterdam, exact same dates as the flight above, the price is:

Airfare Costs
Travelers Adult Total
Base Fare $459.66 $459.66
Tax $395.07 $395.07
Total $854.73 $854.73

Is there a breakdown of what those taxes are? And does this mean that you pay more to the originating country than the guest country?

Also, is this because US has a cheap gasoline tax on the roads while Europe has a much, much higher one, so it's in reverse here?

I'm really not one to know all of this so I thought I could find some answers. Thanks in advance if you know and can help!

 

[jis]

It is hard to tell without seeing a complete detailed accounting of the fare you paid. Some countries have arrival tax, but no departure tax! or different taxes. So the difference may have nothing to do with US, or it might. The various US charges are quite hefty actually.

Here is an example of a complete breakdown of the amount, for my February trip to Israel (Round trip):

Fare Breakdown Airfare: 372.00 USD International Surcharge: 516.00 U.S. Federal Transportation Tax: 35.40 U.S. Customs User Fee: 5.50 U.S. Immigration User Fee: 7.00 U.S. APHIS User Fee: 5.00 September 11th Security Fee: 11.20 Israel Departure Tax: 26.36 U.S. Passenger Facility Charge: 13.50 Per Person Total: 991.96 USD eTicket Total: 991.96 USD
Most interestingly, the so called "International Surcharge" is counted as part of the fare paid for the purposes of computing the dollar value based FF points! Naturally all the real taxes are not.

Here's another example:

Fare Breakdown Airfare: 4,313.00 USD U.S. Customs User Fee: 5.50 U.S. Immigration User Fee: 7.00 U.S. APHIS User Fee: 5.00 U.S. Federal Transportation Tax: 35.40 September 11th Security Fee: 11.20 India Passenger Service Charge: 7.90 India Passenger Service Fee: 3.65 International Surcharge: 977.00 International Surcharge (YR): 5.00 U.S. Passenger Facility Charge: 13.50 Per Person Total: 5,384.15 USD eTicket Total: 5,384.15 USD

 

[Devil's Advocate]

[SIZE=10.5pt]Here's a breakdown of JFK-AMS-JFK on Delta.[/SIZE]

[SIZE=10.5pt]Fare for 1 adult[/SIZE]

[SIZE=10.5pt]Fare 1: Carrier DL TLXB77US NYC to AMS (rules) [/SIZE]

[SIZE=10.5pt]Passenger type ADT, round trip fare, booking code T[/SIZE]

[SIZE=10.5pt]Covers JFK-AMS (Economy) $251.50[/SIZE]

[SIZE=10.5pt]Fare 2: Carrier DL TLXB77US AMS to NYC (rules)[/SIZE]

[SIZE=10.5pt]Passenger type ADT, round trip fare, booking code T[/SIZE]

[SIZE=10.5pt]Covers AMS-JFK (Economy) $251.50[/SIZE]

[SIZE=10.5pt]DL YR surcharge (YR) $516.00 <---Bogus Fuel Surcharge exceeds ticket price[/SIZE]

[SIZE=10.5pt]US International Departure Tax (US) $17.70 [/SIZE]

[SIZE=10.5pt]US September 11th Security Fee (AY) $5.60 <---Transportation Security Administration[/SIZE]

[SIZE=10.5pt]US Passenger Facility Charge (XF) $4.50 <---Direct to Passenger Airport Fees[/SIZE]

[SIZE=10.5pt]USDA APHIS Fee (XA) $5.00 <---Animal and Plant Health Inspection Service[/SIZE]

[SIZE=10.5pt]US Immigration Fee (XY) $7.00 [/SIZE]

[SIZE=10.5pt]US Customs Fee (YC) $5.50[/SIZE]

[SIZE=10.5pt]The Netherlands Passenger Service Charge (RN) $16.20[/SIZE]

[SIZE=10.5pt]The Netherlands Domestic and International Noise Surcharge (VV) $0.60[/SIZE]

[SIZE=10.5pt]The Netherlands Security Service Charge (CJ) $13.70[/SIZE]

[SIZE=10.5pt]US International Arrival Tax (US) $17.70[/SIZE]

[SIZE=10.5pt]Subtotal per passenger $1,112.50[/SIZE]

----------------------

US Taxes and Fees = $63

[SIZE=11pt]Netherlands Taxes and Fees = $30.50[/SIZE]

 

[Bob Dylan]

Very interesting! That "noise surcharge" in AMS is a new one for me! (It' s been several years since I took International flights)

And International Air Tickets are looking like City of Austin Energy bills, Time Warner bills or even the old pages and pages of Ma Bell bills!

( Grandpa, what's Ma Bell?)

 

[Devil's Advocate]

Very interesting! That "noise surcharge" in AMS is a new one for me! (It' s been several years since I took International flights) And International Air Tickets are looking like City of Austin Energy bills, Time Warner bills or even the old pages and pages of Ma Bell bills! ( Grandpa, what's Ma Bell?)

In reality due to 14 CFR 399.84 most customers never see any of this. Uneducated customers were attacking the government for fuel surcharges labeled as taxes without realizing that it was an intentional ploy to defray private operating expenses. So now everything is wrapped into a single cost (excepting baggage fees, seat selection, on-board purchases, etc.) to avoid surprises. Frankly I wish everything was wrapped into a single charge, including hotels and car rentals. If a fee is unavoidable then it should be part of the base rate.

 

[jis]

Hotel and Car rental? Really? Who is going to do the wrapping? The travel agent? At least the corporate travel agent does that already for us. I don't see how an airline can do that.

 

[beautifulplanet]

I was looking at a sample BA flight from JFK to Amsterdam to JFK. [...] Is there a breakdown of what those taxes are?

So flying with British Airways (BA) from JFK to Amsterdam, back to JFK. Not knowing the exact day you researched, as a sample day I looked up Feb 11 with a return on Feb 25.

For one adult, the US website of British Airways shows:

Fare: $823.00

Taxes, fees and carrier charges per person: $695.06

Total price: $1,518.06

Customs User Fee - USA USD 5.50

Transportation Tax(Departure) - USA USD 17.70

Transportation Tax(Arrival) - USA USD 17.70

Animal & Plant Health User Fee (Aphis) - USA USD 5.00

Immigration User Fee - USA USD 7.00

Passenger Civil Aviation Security Service Fee - USA USD 5.60

Passenger Service Charge - United Kingdom USD 82.03

Passenger Service Charge - Netherlands USD 17.37

Noise Isolation Charge - Netherlands USD 2.25

Security Service Charge - Netherlands USD 14.41

Passenger Facility Charge USD 4.50

Total government, authority and airport charges* USD 179.06

Carrier imposed charge USD 516.00

Total British Airways fees and carrier charges USD 516.00

Total taxes, fees and carrier charges per person USD 695.06

At least some might think, it might always be a tempting easy path to walk down for airlines to say "Look, the reason why your fare is so high is because of government and its many taxes", still this breakdown reveals that the actual government taxes and fees of the three countries involved just come up to about a quarter of what is being billed in the "taxes & fees" section, seperate from the "fare", though those $516.00 in carrier charges could just as well be put into the fare column. Still then it would look more unfavorable for British Airways, customers might think "BA actually charges me more than $1,300.00 for the flight, and just $179.06 are government taxes and fees" - so it might be beneficial for BA to present the numbers the way they do, and customers won't find out unless they click on that little info symbol next to "taxes" amount, for a new pop-up to open.

And does this mean that you pay more to the originating country than the guest country?

Also, is this because US has a cheap gasoline tax on the roads while Europe has a much, much higher one, so it's in reverse here?

This does not have anything to do with any gasoline tax.

No matter if you fly JFK-AMS-JFK or AMS-JFK-AMS, the taxes and fees are the same.

For the sample days, Feb 11 to Feb 25, an AMS-JFK-AMS flight on the British Airways website shows:

Fare EUR 370.00

Taxes, fees and carrier charges per person EUR 354.85

Total price EUR 724.85

When clicking on the info button next to the "taxes", the breakdown reveals that EUR 158.85 are actual government taxes and fees. Which pretty much up to the exact dollar translates to the USD 179.06 quoted above. So no matter if flying a transatlantic round-trip originating in the U.S., or in Europe, the government taxes and fees are the same. The only reason for the difference in price is that the airlines are charging different prices in different markets.

 

[Devil's Advocate]

Hotel and Car rental? Really? Who is going to do the wrapping? The travel agent? At least the corporate travel agent does that already for us. I don't see how an airline can do that.

I'm not talking about an airline charging me for cars and hotels. I'm talking about unavoidable charges such as mandatory resort fees and legally required insurance fees that are impossible to avoid but still left out of the total cost you see when you reserve a car or a room. This can occur regardless of if you book directly or through an aggregate broker. I'm all about transparency but I still want the reservation total to represent every unavoidable fee without any surprises when I arrive several thousand miles from home. I cannot tell you how much money I've had to spend on extra fees that were impossible to avoid and yet came with no warning until payment was due. I'm smart enough to never get caught without enough funds but it really leaves a bad taste in my mouth and puts me off future visits. I doubt I'm the only person who feels this way and it makes me wonder if silly tricks like this are why so many Americans never bother to travel abroad. Where I live millions of folks never bother to travel further than one state over.

 

[Bob Dylan]

Agree Chris, the Best Surprise when paying your bill is No Surprise!

I'm especially irked by stuff I don't use such " resort fees" ( I'm staying @_a Resort?),Spa Fees, Pool fees, Beach fees, telephone fees, WiFi fees, mandatory tips/ service charges such as for room service), mini bar stocking fees etc.

And of course " taxes and fees" on tourists for Rentcars, Hotels, alcohol and food etc to pay for Taj Mahal Sports Stadiums,Airport Services, Convention Centers etc are also a PITA!!

This doesn't just happen overseas or far from home either, seems like even low end joints such as chain motels are getting in on the gouge the traveler racket!

 

[beautifulplanet]

The price difference mentioned for a JFK-AMS British Airways round-trip flight was $1,165.07 when originating in New York, and $854.73 when originating in Amsterdam. So the round-trip originating in Europe was about 27% cheaper, than the round-trip originating in the U.S. - often, the difference might be even more than that, f.e. the round-trip originating in Europe being 50% cheaper, like half price, compared to what travelers originating in the U.S. would have to pay.

The bottom question is: why are round trip flights from US to Europe much more expensive than if you originate in Europe?

I was looking at a sample BA flight from JFK to Amsterdam to JFK.

The BA JFK-AMS example dates provided above (Feb 11-Feb 25), the difference was $1,518.06 to EUR 724.85 (about $820), so the price difference already came close to being 50%, both were the cheapest Economy seats offered on British Airways' US website.

To answer the question "why are round trip flights from US to Europe much more expensive than if you originate in Europe", at least some might think it is because those are different markets, and it's not unusual that different prices are charged for the same product in different localities. If airlines are able to charge more in one country than the other, they will. Airlines are private or state-owned for-profit companies, they will charge as much as they can.

When it comes to traditional airlines and transatlantic travel, the only reason they are able to do this because they only offer cheap prices for round-trip fares, while one-way fares often cost even more than the cheapest round-trip. If airlines offered one-ways for the price of half a round-trip, then in your example of JFK-AMS-JFK, people would buy two one-ways JFK-AMS and AMS-JFK on British Airways' dutch website, and be able to pay about 25-50% less than buying either a round-trip or two one-ways JFK-AMS and AMS-JFK on British Airways' US website. So the fare system only based on cheap round-trips and expensive one-ways allows traditional airlines to implement these different price levels in different markets. This fare system is being applied for transatlantic itineraries, but not for U.S. domestic flights - within in the US, low-fare carriers like Spirit or JetBlue offer cheap one-ways for the price of half a round-trip, so traditional airlines have to offer that as well if they would like to stay competitive.

At the same time, there might be at least some people, who think that transatlantic travel is more expensive than it should be - it should be cheaper for travel out of Europe, and especially much cheaper for travel out of the United States or Canada.

As written in a different thread here in the non-rail transportation forum:

When selecting the right dates, it is possible to purchase a round-trip fare with nonstop flights from New York/Newark to Los Angeles for $340 from United to JetBlue.

It's approximately 6 hours of flight time, and about 2,500 miles.

To fly New York/Newark to London with British Airways/Virgin Atlantic/American/Delta/United etc. is about $820 for a round-trip ticket.

It's approximately 7 hours of flight time, and about 3,400 miles.

So it's a comparable flight time, still more than twice the fare. Even when going by distance, not flight time, it's only 40% more miles flown, but the fare is more than double. Also when considering in that aircraft utilization may not be as efficient when flying transatlantic, and additional security/immigration passenger fees being part of the ticket, there is no objective reason for transatlantic fares to be so high. And that's where Norwegian Air comes in.

So there are low-fare carriers going long-haul, like Norwegian Air and others, that offer the same fares, also one-way fares, no matter which side of the pond you originate from. This means, in order to answer the question "why are round trip flights from US to Europe much more expensive than if you originate in Europe?", there already are these airlines where the round-trip is always the same price no matter where the flight originates, and of course the same even goes for one-ways costing just the price that one part of the round-trip would cost - just British Airways is not one of the airlines.

As these airlines expand, there possibly might be much more service like that in the future. Some speculate that JetBlue and RyanAir will eventually also get into long-haul, though my guess would be that for the foreseeable future it is up to Norwegian and other existing trans-atlantic low-cost carriers to shake up the market. In case at some point in time, transatlantic low-cost carrier market penetration reaches a certain level, also traditional carriers might change their trans-atlantic fare system to something similar to U.S. domestic flights.

More about Norwegian Air, other low-cost long-distance air carriers and cheap transatlantic fares in the following thread:

Norwegian Air: should more flights into US be allowed - or not?

http://discuss.amtraktrains.com/index.php?/topic/62451-norwegian-air-should-more-flights-into-us-be-allowed-or-not/

 

[jis]

Are you sure you are not a marketing guy from Norwegian Air in disguise?

 

[beautifulplanet]

Are you sure you are not a marketing guy from Norwegian Air in disguise?

*lol* A marketing person would probably write shorter posts, write them more elegantly, with less spelling errors. Then again, it somehow would seem like a break in logic for a low-fare airline eleminating all unnecessary costs, to employ a marketing person in order to write about them in a rail forum. Getting off-topic: sometimes it doesn't seem clear how it is like in the Florida high-speed rail thread, as it might be possible to have a financial stake in the project. On-topic: As it is not possible to take rail transatlantic just yet, for those traveling transatlantic it will probably be necessary to deal with airlines, fares and taxes for a while...

 

[Barciur]

Thanks for a nice breakdown, beautifulplanet. Seems like a lot of work to divest all of it but all very interesting and for a good reason!

Where are you finding the date? When I tried booking via US website of British Airways it only shows: Taxes, fees and carrier charges for the entire journey are approximately $677.17 - $1027.27 per adult and are included in the prices above.

and the pop up is a general text site, doesn't say the actual amounts..

Hotel and Car rental? Really? Who is going to do the wrapping? The travel agent? At least the corporate travel agent does that already for us. I don't see how an airline can do that.

I'm not talking about an airline charging me for cars and hotels. I'm talking about unavoidable charges such as mandatory resort fees and legally required insurance fees that are impossible to avoid but still left out of the total cost you see when you reserve a car or a room. This can occur regardless of if you book directly or through an aggregate broker. I'm all about transparency but I still want the reservation total to represent every unavoidable fee without any surprises when I arrive several thousand miles from home. I cannot tell you how much money I've had to spend on extra fees that were impossible to avoid and yet came with no warning until payment was due. I'm smart enough to never get caught without enough funds but it really leaves a bad taste in my mouth and puts me off future visits. I doubt I'm the only person who feels this way and it makes me wonder if silly tricks like this are why so many Americans never bother to travel abroad. Where I live millions of folks never bother to travel further than one state over.

It's funny you say this - when I came to the US the first time I was shocked that sales tax was NOT included in the list price. In fact, often a lot of taxes are not. I don't see how this has a lot to do with travelling abroad - when I travela round the US, I see that all the time. Whenever I book a hotel, fine print says "taxes not included" and the total comes out to be bigger. When I go to a concert, it's advertised as $25 - only to be faced with a "service fee of $8.50" and stuck with paying $33.50 or sometimes more. This is very common here, unfortunately.

 

[jis]

It gets worse. You can never be sure when something is included in the quoted price and when it is not. For example gasoline price as quoted includes all taxes. But a chewing gum sold at the same gas station will happily quote the base price of the chewing gum and pile on an appropriate tax on it when you go to checkout.

With airlines I have never figured out what purpose these "surcharges" serve, since even the airlines agree that it is part of the fare when it comes to computing dollar value based FF points, unlike the real taxes levied by real taxing authorities. Why quote it separately? Who are they trying to kid? Themselves?

BTW DA, I definitely misread what you wrote, and I do agree with the corrected interpretation of it.

Another completely crazy American institution is this business about institutionalized tipping. It is basically evolving into something that pretty much resembles the "baksheesh" system in Asian countries. Indeed "baksheesh" is the word for tip, but then it becomes essentially mandatory almost and then it starts looking more like a tithe. Indeed the standard that seems to have evolved is hovering around two times tithe (tithe being a derivative of "tenth").

For example in AU it is revealed wisdom that Acela First Class OBS people must be tipped. In almost every way they perform exactly the same service as an airline cabin crew, and are arguably less trained in matters of safety than the airline crew, and yet I have never heard of any one positing that airline cabin crew must be tipped. So where does this come from? Political correctness of sorts?

 

[Paulus]

For example in AU it is revealed wisdom that Acela First Class OBS people must be tipped. In almost every way they perform exactly the same service as an airline cabin crew, and are arguably less trained in matters of safety than the airline crew, and yet I have never heard of any one positing that airline cabin crew must be tipped. So where does this come from? Political correctness of sorts?

That I can tell you in one word: Tradition!

 

[the_traveler]

My BIL recently flew BOS-CPH on an award ticket, but had to pay taxes. Originally he was to fly via LHR and AMS, but due to some unknown reason his reservation got cancelled! Luckily this was discovered early enough to rebook.

He was rebooked BOS-CPH, via AMS only. The taxes on the first reservation was $192.30, but only $96.10 on the 2nd one! So just by not transferring at Heathrow, the taxes were 1/2 price. The British taxes alone were as much as the U.S., Dutch and Danish taxes combined!

 

[Bob Dylan]

My BIL recently flew BOS-CPH on an award ticket, but had to pay taxes. Originally he was to fly via LHR and AMS, but due to some unknown reason his reservation got cancelled! Luckily this was discovered early enough to rebook.

He was rebooked BOS-CPH, via AMS only. The taxes on the first reservation was $192.30, but only $96.10 on the 2nd one! So just by not transferring at Heathrow, the taxes were 1/2 price. The British taxes alone were as much as the U.S., Dutch and Danish taxes combined!

The driving force behind the Boston Tea Party, British Taxes!! " No taxation without representation!" was their motto!
Seems like this applies to the citizens of Washington, DC who have no voting representation in the Congress eh?!!!

 

[jis]

You get charged fees all the time without any representation. The tax issue mostly has to do with property taxes and such, not user fees, which most of these miscellaneous add ons to air tickets are.