http://www.businessweek.com/articles/2013-12-03/airlines-bring-out-the-barf-bags-to-stop-security-fee-hike

Airline Fees

Airlines Bring Out the Barf Bags to Stop Security Fee Hike


(Corrects terms of the proposed fee in the second paragraph. )

Courtesy Airlines for AmericaU.S. airlines are using those small barf bags in their seatback pockets to lobby against a possible increase in the $2.50 Sept. 11th security fee. “Are high taxes on air travel making you sick?” a trade association, Airlines for America, is asking on airsickness bags being distributed this week at Reagan National Airport near Washington. The goal is to persuade members of Congress—especially Republicans—that the 9/11 fee is merely a tax by another name and that a scramble for new revenue should not hit air travelers.

The possible increase, which has been proposed before but failed to advance in Congress, has gotten new life as politicians struggle to avoid further cuts outlined by budget sequestration. As a result, the $2.50 fee to fund the Transportation Security Administration could double to $5. Airlines are seething because higher overall ticket costs reduce sales, which is why carriers have been keen in recent years to add every imaginable optional fee of their own rather than boost underlying fares. “Congress and the administration should focus on improving TSA efficiency, rather than use airline passengers as their own personal piggy bank to finance a budget deal,” said Airlines for America spokesman Vaughn Jennings.

A key supporter of the higher fee is House Budget Committee Chairman Paul Ryan (R-Wisc.), according to Bloomberg News report citing Ryan aides. For the Republican, it’s part of an effort to raise funds through fees without raising taxes. The airlines, of course, don’t see it that way. “They’ve come up with a semantic argument that fees are not the same thing as taxes,” said Sean Kennedy, a senior lobbyist for the airlines. As the airlines see it, every $1 increase in ticket price reduces demand by as much as 2 percent.

The airlines also argue that the TSA’s budget rose 19 percent from 2007 to 2012, while the number of people being screened fell by 11 percent. The lobbying effort has been taken up by six additional groups, including the nation’s largest pilots’ union and a business travel association. “While fiscal responsibility is a priority for our country, solving sequestration on the backs of the traveling public is not an appropriate solution,” the groups wrote in a Nov. 20 letter to Ryan and Democratic Senator Patty Murray of Washington, who chairs the Senate Budget Committee.

While the barf bag stunt at Reagan National Airport seems designed to rally passengers to the anti-fee cause, it’s not clear that the airlines want to save passengers from the extra expenses. The proposal primarily peeves the carriers because it would crimp their ability to raise fares, argues Henry Harteveldt, a travel industry analyst with consulting firm Hudson Crossing. “Any time you raise a tax—in any industry—it limits the ability of the seller to raise its prices because the cumulative real price the customer pays is higher overall,” he says.

Bachman is an associate editor for Businessweek.com.

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