WASHINGTON -- Congress surprised the industry by pushing up the
collection date for the new international air ticket fees.
The law states that the new $24 roundtrip fee ($12 departure and
$12 arrival) must be collected on tickets issued on or after Aug.
13 for international air travel on or after Oct. 1. The industry
was expecting to start collecting the $24 on Oct. 1, the day after
the current $6 departure fee expires.
The tax bill originally contained language that would have been
much worse than the current situation. It would have forced
airlines and agents to begin collecting the fee the moment
President Clinton signed the bill into law, which happened on Aug.
5. The unconventional start-up date was overlooked by scores of
airline lobbyists because they were too busy fighting among
themselves over the form of the domestic ticket tax, according to
sources close to the negotiations.
After Congress passed the bill, it was finally noticed that the
airlines wouldn't have enough time to load the new international
fee into their computers. House Ways and Means Committee chairman
Bill Archer (R-Texas) averted a potential disaster by pushing a
resolution through Congress that gave the carriers until Aug. 13 to
reprogram their systems. Under the law, the industry will start
collecting the new domestic ticket tax and segment fee on Oct.
ASTA president Michael Spinelli voiced his displeasure with the
early collection date for international fees, but conceded, "There
is nothing agents can do." Paul Ruden, ASTA staff senior vice
president of legal and industry affairs, said, "Clients should buy
sooner rather than later. But Aug. 13 is right around the corner. I
don't think there are going to be any massive changes in buying
practices as a result of this, except perhaps, some people might
decide not to go."
ARTA president John Hawks said the situation "just illustrates
the federal government doesn't have any idea of how small
businesses work, particularly travel agencies. It is the agents who
are forced to explain to the passengers why they are paying the tax
Bill Best, director of travel for AAA Michigan, which does $170
million in travel sales, said it seems that Congress is saying
"we've cut you off at the pass" to consumers who would have beaten
the extra tax by buying their international tickets before Oct. 1.
"The difficulty will be in explaining what the tax is for. [The
government is] taking $6 and quadrupling it. What's the benefit for
the traveler?" Best said. "It's an act of Congress. Need I say
Rob Moses, vice president of corporate development at Hickory
Travel Systems, said, "From what I understand it's not that
significant" for business travelers. "Its more of a
pain-in-the-neck type thing. I don't think it's going to greatly
affect international travel." Moses noted any changes in the ticket
tax deadline would be reflected quickly in the CRSs.
John Hintz, vice president of client services at Direct Travel
in New York, said there has just been a "quiet acceptance" among
clients. Michael Boult, general manager of supplier relations for
Rosenbluth International, said, "Most of the clients don't really
pay attention to the tax side of the business. On the international
side of the house, there are really quite a lot of taxes."
The airlines were angry that Congress chose again to burden the
industry with additional taxes, but they said they did not think
the higher international fee would have a huge impact on sales.
Michael Milligan, Fran Durbin, Michele McDonald and David
Jones contributed to this report.