In the turmoil of the Washington budget battles, we have the airline industry, whose executives' motto is more Gordon Gekko than Adam Smith: Greed is Good. When faced with the opportunity of not having to pay federal taxes on airline tickets, are the airlines using it to build traffic and sell more seats smack in the middle of vacatin season -- the "factory in the poor country" model of benefitting society? Hardly. Instead they're raising base prices to make up the difference and pocketing the cash:
Several federal taxes on airline tickets expired over the weekend after Congress failed to pass legislation to keep the Federal Aviation Administration running at full speed.
Raising the fares allows the airlines to charge the consumer the same amount as before, while pocketing money previously collected for the government.
It could turn into a windfall for airlines if the stalemate in Congress drags on. The government estimates that the expiring taxes total $200 million a week. And with jet fuel prices much higher than last year, airlines can use the cash.
As of midday Monday, nearly all large U.S. airlines had raised prices, but fare watchers said Alaska Airlines, Hawaiian Airlines and Spirit Airlines had not. The CEO of Spirit, a small, low-fare outfit that accounts for less than 1 percent of the market, said the industry looked bad.
"The taxes that Spirit and all the other airlines collect don't belong to us," Ben Baldanza said. "It's the taxpayers' money. It was never Spirit's money. It would be a grab to take that money."
Mr. Baldanza, you'll never be accepted into the rich guys' club with an attitude like that.