An Attempt To Explain The Total Airfare

Yesterday my partner forwarded me an article that was posted on the Yahoo News site regarding Spirit Airlines. It is now charging the passenger a separate fee just to make a reservation with this airline.  If you want to read the article, here’s the link: http://tech.yahoo.com/blogs/null/127531 . I had to read this article twice because I could not understand what all the “NEWS” was about.

That article refers to another news article from the Wall Street Journal and again I was a bit confused, about how did this story become such a “News Flash”. I especially loved reading the comments that are being posted.

I do not mean this to be rude to anyone, but I question where has the traveling public been over the last year let alone the last few decades.

Travel agents and agencies, in general, have been charging a fee to issue airline tickets for the last 2 decades. The reason for charging that fee was that the airlines had stopped paying commissions to the travel agent, which was a major source of income.  Over the last year or two most airlines began to charge a fee to purchase an airline ticket. You may ask whether the travel agent community was surprised, and the answer would most likely be an emphatic NO.

Over the last year or so, the airline industry has become rather creative in adding additional fees to the product. On August 8th, 2008 in U S A Today Mr. Gary Stoller writes an excellent article. He goes into great detail about the new and various fees. It is very true that at the time of his article, Spirit Airlines was not charging a ticketing fee but if one airline does something then the domino affect takes place, especially in regard to fees and airfares.

Headline: Airlines’ rising fees confuse and anger their passengers.

The link: http://www.usatoday.com/money/industries/travel/2008-08-11-rising-airline-fees_N.htm

In preparing this post, even I, as a veteran travel agent, still find the airfare structure rather amazing.  I found these alternative sources of information on fees and taxes that you might be interested in reviewing.

The Air Transport Association of America; U.S. Aviation Excise Taxes and Fees Domestic Ticket Taxes; The Ticket Tax Project is run jointly by the MIT Global Airline Industry Program and Daniel Webster College.

I was most amused to see that even MIT, along with a joint venture with Daniel Webster College, has taken up the challenge in understanding airfares and those fees that are included in an airline ticket.

I hope the examples below regarding two different round trip airfares clears up some of your questions.

Airfare breakdown for travel New York City JFK Airport to London UK Heathrow Airport.

Click image to enlarge

Click image to enlarge

An explanation and a breakdown of this particular airfare above:

$428.00 (USD) is the BASE airfare, which American Airlines is charging for the round trip ticket departing from New York City JFK, to London Heathrow United Kingdom

$32.20 (US) is the United States Tax

$5.50 (YC) is the Customs User Fee, a charge to go through Customs Inspection

$7.00 (XY) is a US Federal Inspection fee.

$5.00 (XA) is called the Asphis User fee. This is a fee that goes towards US Customs Agents, when they are searching your baggage.

$2.50 (AY) is the United States Security fee

$56.20 (GB) is the Great Britain Air Passenger Duty tax

$29.80 (UB) is for the Departure Tax from Great Britain

$222.00 (YQ) is the Fuel surcharge fee, which does fluctuate

$4.50 (XF) JFK aircraft landing fee.

$1.00    (ROE ) is the Rate of Exchange.

XT stands for the total taxes and various fees, here it is $364.70

Which brings the total cost of this particular airline ticket to $792.70

..

Airfare breakdown for travel New York City La Guardia Airport to Dallas Fort Worth International Airport.

Click image to enlarge

Click image to enlarge

An explanation and breakdown of this particular airfare above:

$262.73 (USD) is the BASE airfare which American Airlines departing from New York City La Guardia Airport to Dallas Fort Worth Airport Texas.

$19.77 (US) is the United States Tax

$7.20   (ZP) is the Segment tax, for landing and taking off on each aircraft

$5.00   (AY) is for the Airport Security Checks

$9.00  (XF) is for the Local Airport taxes.

XT stands for the total taxes and various fees, here it is $40.97

Which brings the total cost of this particular airline ticket to $304.70

I would also add a few comments about airfares.

As I learned many years ago, purchasing an airline ticket is like purchasing a piece of stock in a company, one moment it is selling at $35.00 per share and the next … (well in this economy who knows where the stock price is going to go), but the airlines can and DO change their airfare structures several times per day.

In as much as the travel agent community does charge a airline ticket fee, at least none that I know of charge you to reserve a seat on the airplane (we can’t say this about some airlines) as long as there are seats to be reserved. We sometimes can even “open up” a specific seat request with an airline.

Why and how does an airline determine the airfare, that question will always remain a mystery to me and most likely always will be.

In an upcoming post, I’ll be writing about “lowest” airfare (travel agent versus online-booking).
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One Response

  1. This is very up-to-date info. I’ll share it on Facebook.

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