Thursday, December 19, 2013
The Bipartisan Budget Act of 2013, also known as the Murray-Ryan bill, has now passed both chambers of the U.S. Congress and will be signed into law by President Obama. The agreement, which increases the Sept. 11 passenger security fee from $2.50 to $5.60 per one-way trip, represents a failure of airlines' recent lobbying efforts on two fronts. First, U.S. airlines have argued, ineffectively it turns out, that air transport taxes are already too high. Perhaps more importantly, the industry has been pushing the idea that all of the various fees associated with air transport amount to taxes by another name. While primarily semantic in nature, the argument is an important one as Republican negotiators made rejection of tax increases a precondition of negotiations. Thus the ability to classify revenue raised from air transport fees as distinct from tax revenues appears to have played a significant role in how the air transport sector came to be chosen as a place from which to derive budget savings.
It wasn't all bad for the airlines as an underreported provision in the legislation repeals a security fee charged directly to carriers instead of to passengers. And of course, there are those who argue airlines are still getting off easy.