Disclose airline fees, missed tax revenue: report

Airlines have made a killing by charging additional fees for ancillary services, charges which have been untaxed and not clearly delineated to consumers, a recent report revealed.

"[I]nformation about [airline] fees is not fully disclosed through all ticket distribution channels used by consumers, making it difficult for them to compare the total cost of flights offered by different carriers," the Government Accountability Office (GAO) said in a recent report.

While it is not clear if the GAO's criticism will register with airlines, the Department of Transportation has recently issued a Notice of Proposed Rulemaking to consider the disclosure of airline-imposed optional fees. They do not currently require such disclosure.

According to the Associated Press, Sabre Holdings Vice President, Kyle Moore, told the House Transportation and Infrastructure Committee that airlines are not providing agents and ticketing services with an outline of fees charged.

The news agency reported that almost half of airline tickets bought in the US are bought through ticketing services.

Spirit Airlines chief executive Ben Baldanza admitted that he wouldn't give fee information to ticketing agencies unless all airlines did for fear that it would make Spirit's prices look higher than those who excluded the cost of extras.

Supplementing fare revenues, US airlines collected billions in such fees in the last budget year.

The government could have earned USD186 million last year if just the checked bag fees had been taxed, an amount likely to grow if trends continue, claimed the GAO report.

Mr Baldanza argued that taxing fee revenue would hurt the recovering airline industry, harming competition and raising prices, reported the Wall Street Journal.

Ancillary fees should not be taxed because they "do not use the infrastructure that the tax is intended to pay for," Mr Baldanza added.