Cynics would say it was inevitable. I booked an airline ticket the other day and was dismayed to see that taxes and surcharges exceeded the price of the ticket.
Airlines and governments are almost equally to blame for this ludicrous state of affairs in which advertised airfares bear no resemblance to reality.
Complain all you want about high gasoline prices, the price on the pump is what you pay – all federal and provincial taxes included.
Why is it that gasoline retailers post prices this way, and not airlines? No doubt gas stations do it because the public would not stand for it any other way. What's the point of having a posted price of, say, 40 cents a litre for gasoline if the motorist is going to have to pay 85 cents a litre?
Ontario government-run liquor stores have a different reason for including taxes in their posted prices. My guess is that the government would prefer us not to know how much they are charging in liquor taxes.
Back to the airlines. Their advertised fares have become a sick joke in recent years. But, until last week, I never encountered a situation when taxes and surcharges were higher than the fare.
It happened when I bought a round-trip ticket on Ottawa-based Zoom Airlines for travel to and from London's Gatwick Airport in March. As usual these days, the airline did it in two transactions – one for the outward, one for the return journey.
It was for the return that I got a shock. Zoom's fare was $199. The taxes and surcharges were a staggering $205.25 – for a total cost for the return leg of $404.25.
How could this be? The Zoom fare from Ottawa to London was $179 (slightly lower than the return because I was flying at a less busy time), and taxes and surcharges on top of that were $114.15.
I looked at the fine print on my e-ticket, and saw that fees for the return flight included $124 under the heading "U.K. departure fee."
I fly to London on average twice a year, and never noticed paying a U.K. departure fee before. Turns out I hadn't been paying attention. Still, it also turns out that the British government has just doubled the U.K. departure fee, effective Feb. 1.
From Feb. 1, anyone flying from Britain to Canada in economy class pays a whopping 40 pounds sterling in departure tax. That's about $90. In business or first class, the fee will be 80 pounds, or $180.
Why, I wondered, if the U.K. departure fee was doubling to the equivalent of $90 for economy-class passengers, was I being charged $124 by Zoom Airlines?
It turns out that Britain has TWO departure fees, according to David Clements, Zoom vice-president of sales and marketing. The other fee is for airport services, and is the equivalent of about $34 in Canadian money for passengers flying from Gatwick, he said.
The newly-doubled departure tax will be the same on all long-haul flights from Britain, which now has among the highest airport departure taxes in the world.
The British government claims it is raising the departure tax to help save the planet, or something. Few in Britain seem to believe it. Most see it as a tax grab, according to the British media. Fleece the foreign tourists is the signal I get from Tony Blair.
Canadian air carriers can't help it when domestic or foreign governments slap taxes on their passengers. But the airlines could be more upfront about it. These taxes are a cost of doing business. Why not include them in advertised fares?
Airlines can claim – legitimately – that the taxes are not their responsibility, and the public is entitled to know who is taxing them, and how much.
But airlines commonly add on a "fuel surcharge" that has nothing to do with any government. In the case of my Zoom ticket, I was charged an extra $81.25 each way – a total of $162.50 – for "navigation and fuel surcharge."
Oil prices remain high and all airlines add a surcharge to the price of a ticket to help pay for fuel, says Zoom's Mr. Clements. True, but it's not right. Why not a wings surcharge, or a pilot surcharge? Or even an air plane surcharge?
Come to think of it, the cost of putting gas in my car is small compared with all the other costs of car ownership, like depreciation, taxes and insurance.
Anyone in business has to bear all the costs of doing business. We all have to pass on these costs to our customers. The fairest way to do so is in the price of the product we sell. It's about time airlines learned that.
Source: Ottawa Business Journal
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