Honolulu Star-Bulletin Business

Airfares rise as tax reappears

From staff & wire reports

NEW YORK -- Some of the country's biggest airlines said today they were raising ticket prices after the government reinstated a 10 percent tax on all domestic flights.

The increased fares come even though airlines didn't lower prices when the tax expired at the end of the year. But other carriers, including American, which has the biggest domestic route network, said they would keep fares the same.

Interisland fares on Aloha Airlines and Hawaiian Airlines went up, as did some mainland-Hawaii fares.

David Fuller of local travel agency International Travel Service Inc. said amounts will vary. For tax purposes, Hawaii is considered an international destination, which are taxed according to a ratio that varies according to the distance of the trip, he said.

A $6 international departure tax was reintroduced, requiring Hawaii-mainland passengers to pay a total of $12 more on round-trip tickets.

Fuller said the picture is complicated by the expiration yesterday of some low-end Hawaii mainland fare deals.

Still, United Airlines said it boosted prices 10 percent on nearly all of its routes, except those also served by Southwest Airlines, which was bringing back a 2-for-1 ticket promotion.

Northwest Airlines said it was boosting prices by 4 percent. Delta said it would raise most of its fares, but keep prices the same on some shorter destinations where it faces more competition.

US Airways, which until recently was known as USAir, said it would keep all prices the same.

Tom Parsons, editor of Best Fares magazine in Arlington, Texas., said other airlines could quickly could fall in line take back the increases. "Everybody will have to come back or there'll look like the bad guys," he said.

Lawmakers voted a week ago to reinstate the package of ticket taxes, which expired Dec. 31. It took effect at 12:01 a.m. today.

The taxes are used to fund airport safety projects, and also includes a 6.25 percent tax on domestic air cargo.



The Associated Press and Star-Bulletin reporter
Russ Lynch contributed to this report.




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