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A Taxing Problem – the real cost of your flights

Whilst many airlines have made improvements in this area, the cost of travelling can still be misleading.

“All flights £1!” reads the advertisement from the budget airline. Sounds good doesn’t it? You get online, the airline’s search engine is slick and works well, there’s availability on the flight you want and you go to pay….and suddenly the price is 25 times as much.

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This is not an uncommon experience.

In February 2007, the Office of Fair Trading (OFT) told airlines that they had three months to include “fixed non-optional costs” in the price of flights they were offering. Whilst many airlines have made improvements in this area, the cost of travelling can still be misleading.

At the time of writing, one low cost carrier is charging the customer the slightly bizarre amount of £2.09 to get from Edinburgh to Norwich – “Bargain!” you think. Then £25.90 is added in tax. This is still fairly cheap in itself, but annoying when you initially think you have found a great deal. To try and see the breakdown of the prices you can click for more details on their site and are told:

“Additional taxes and charges are made on the basic ticket price to cover Airport Departure Tax, Passenger Service Charge, a Security/Insurance & Fuel surcharge. “

It seems reasonable to assume that the company are not transporting passengers out of the goodness of their hearts and therefore, some of the taxes and extra charges will be at the airlines discretion to cover their costs – and indeed this is the case. A quick breakdown of these “extras” is outlined below:

Taxes, fees and charges added to air fares

Air Passenger Duty
This is a Government imposed tax (also known as Departure Tax) which is mandatory. The proceeds go to HM Revenue and Customs. The rate was increased by the Government on 1 February 2007.

UK Passenger Service Charge
In 1999 many airlines chose to separate the charge levied by UK airports on a per-passenger basis from the basic price of the ticket. The airlines are charged by the airports for passengers using their facilities during the arrival and departure process. This charge is not a Government tax.

Insurance and security surcharge
September 11th 2001 changed the way of life for airline companies and since then many carriers have been adding an extra charge per passenger to meet the increasing costs of insurance premiums and the added security measures which have been put in place. This charge is not a Government tax.

Fuel surcharge
Many airlines have been subject to rising fuel prices over the last few years and as such, are charging an additional fuel surcharge. The amount charged can vary depending on which airline you use or where you are going to. This charge is not a Government tax.

Other taxes, fees and charges
Passengers on international flights could well be charged taxes, fees and charges imposed by other countries including a Passenger Service Charge relating to the airport to which they are flying.

It is also a “catch-all” term for any other charges the airline feels like adding on. For example, Ryanair will include a mysterious “Ins and Wchr levy” which for those of you who do not speak abbreviation, refers to insurance and wheelchairs. These are not Government imposed taxes.

What the customer wants
Some airlines seem to have realised that headline-grabbing ticket prices which fail to materialise, are not actually the way to endear themselves to customers. British Airways for one have made a virtue of the fact that all prices shown on their website include all taxes and charges.

It is interesting to note, that over the last few months, there has been a gradual movement away from the ludicrously priced flights which are advertised before tax is added. Instead, what some airlines are doing is offering flights with wording such as, “From £5 including charges.”

The key word here is “From” since, much like the newspaper adverts that claim you can get very cheap tickets, when you actually try and find them, the blackout periods and scarcity of seats at this price, mean they are really quite hard to find with any consistency.

Words like “tax”, “charge” and “levy” have a variety of official sounding connotations and it seems that the airlines are happy to hide their pricing strategies behind this linguistic smog. Ultimately, the non-corporate traveller wants to know how much his or her ticket is going to cost.

We do not care how our money is divided up; we just want to get safely to our destination. Everyone accepts that airlines, just like any other business, are there to make money. They should accept this fact publicly and not blame their costs on the Government and certainly not on people in wheelchairs.

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