Monday, August 15, 2011

1555 Fly Zone

An interesting little funding issue happened that went relatively unnoticed under all the brouhaha of the debt ceiling theatre. It was about the FAA.
The Federal Aviation Administration, crux of the watershed moment in American history when Ronald Reagan broke the backs of the unions, is once again in the crosshairs. Seems congress can't come to an agreement on keeping it running.
This time the air traffic controllers are still at work. But 4,000 other employees were furloughed and all airport construction projects were halted. At this point, any full resolution is up in the air.
But the airlines themselves, not afraid to fly in the face of adversity, found a way to turn a little profit while it all went down. Seems part of the shutdown meant that the Feds can no longer collect the federal taxes added to airline ticket prices. (Always smart when you shut down an agency in an attempt to save costs, that you also shut down their revenue collecting arm.)
Like a CEO closing his sales office because orders are slow coming in.
Nope, private enterprise is usually not that dumb. In fact, the airlines were soaring with joy. They quietly raised their ticket prices to equal the difference. By quietly I mean they didn't tell you the tax was ever there to start with and that they made up a non-existent charge to fill in the gap. From $25 to $50 for a round trip.
They pocketed the windfall. The airlines were making, and the government not getting, about $250 million a week. Or about a billion a month. Man alive, that kind of fare doesn't just fall from the sky.
What do you want to bet the airline companies are still charging extra for meals?
America, ya gotta love it.

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