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With record fuel prices already making it challenging to find cheap airplane tickets and cheap vacation packages, now the government is considering raising airline passenger taxes. A plan has been recommended that would increase passenger security fees from $2.50 per segment to a flat $5 each way. Included in the proposal are yearly increases that will raise this fee to $7.50 each way by 2017. It would be left to the Department of Homeland Security whether further increases are warranted. Higher passenger taxes would not necessarily result in better security because approximately 60 percent of the additional revenue raised would be devoted to deficit reduction vs. improved security. A second proposed tax would add a $100 fee to every individual flight. While this increase might mean little, if anything, to large flights departing from O’Hare, it could have a meaningful negative impact on small cities whose airports are already hurting. A $100 fee per plane has a much higher impact per passenger on smaller planes. This increase could lead to the disappearance of flights altogether at smaller airports who have already suffered a significant reduction in service over the years. Aircraft with as few as 19 seats are not uncommon flying out of small airports. This tax would add over $5 per seat to the cost. If a plane flew only half full, which is common on many rural routes, then the cost per passenger exceeds $10. If the proposed air taxes are implemented, small towns can expect even fewer departing flights where flights are already infrequent. Small cities might lose service altogether.
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