Airlines Poised To Profit From FAA Shutdown

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Airlines have been struggling this summer because of higher oil prices. Now they're getting a windfall profit thanks to Congress. Although they don't have to pay aviation taxes during the partial FAA shutdown, they have not lowered fares accordingly; they're keeping the difference.


Airlines have been struggling financially because of higher oil prices and the rough economy in general, but this summer they're enjoying a bit of a windfall, thanks to Congress.

NPR's Mandalit del Barco reports.

MANDALIT DEL BARCO: The Federal Aviation Administration has been partially shut down since July 23rd, when Congress failed to approve its funding. Thousands of FAA employees were furloughed, and the agency has not been collected $28.6 million a day in aviation taxes and fees. But most airlines haven't lowered their ticket prices.

ROBERT MANN: It's going to be a very lucrative period for airlines, much more so than they could ever have expected.

DEL BARCO: Retired airline executive and industry consultant Robert Mann says before the windfall, airlines lost $53 billion over the past decade due to the gloomy economy.

MANN: Having the fees relieved, what did they do? With the exception of the three airlines, Spirit, Alaska and Hawaiian, they just turned around and pocketed the money. There's a bit of hypocrisy in that. So I think their ability to go to the Hill from this point onward and argue that they're overtaxed has just been, essentially, gutted.

DEL BARCO: At least two airlines, Delta and U.S. Air, are now talking about partially refunding customers for flights purchased during the FAA shutdown. By the time Congress reconvenes in September, the FAA may have lost out on more than a billion dollars in airline fees and taxes.

Mandalit del Barco, NPR News.

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