PolitiFact: Despite a little baggage, airline tax claim is cleared for landing

“Taxes and fees amount to about 20 percent of a typical $300 round-trip domestic ticket. That’s higher than taxes on products like alcohol, tobacco and firearms.”

Southwest Airlines CEO Gary Kelly in a Feb. 1 column

Plane tickets have been part of some of the more curious claims taken on by PolitiFact:

“Every time you buy an airline ticket, the federal government runs a background check on you” — PolitiFact Texas: Mostly False

You can use food stamps for a plane ticket to “go to Hawaii” — PolitiFact National: Pants On Fire

Now coming down the runway is a claim by Southwest Airlines CEO Gary Kelly. Southwest carries the most domestic passengers in the U.S. and in 2011 acquired AirTran Airways, the second-busiest carrier at Hartsfield-Jackson International Airport.

Kelly made his statement in a column he wrote for the February issues of the in-flight magazines of Southwest and AirTran.

“Taxes and fees amount to about 20 percent of a typical $300 round-trip domestic ticket,” he stated. “That’s higher than taxes on products like alcohol, tobacco and firearms.”

Let’s see whether Kelly’s claim takes flight.

Cost of an airline ticket

Kelly’s column focused on federal taxes. His source for the taxes on an airline ticket is Airlines for America, an airline industry trade group.

In December, Airlines for America announced details of a campaign to persuade lawmakers to reduce federal taxes on airlines.

Just how high are those taxes?

Southwest spokesman Brad Hawkins used figures provided by Airlines for America to give a breakdown of the four major federal taxes and fees on a ticket with a base price of $300. His example includes one connecting flight each way.

Type of tax/Amount/Total

Excise tax/7.5% x $300/$22.50

Segment fee/$3.90 x 4 segments/ $15.60

Passenger facility charge/$4.50 x 4 segments/$18

TSA (“Sept. 11th”) fee/$2.50 x 4 segments/$10

Grand total $66.10

Based on Hawkins’ calculations, the $66.10 equals 22 percent of the cost of the $300 ticket, exceeding the 20 percent that Kelly claimed.

We ran Kelly’s statement and his itinerary by Joakim Karlsson, a researcher with the Airline Ticket Tax Project at the Massachusetts Institute of Technology. He called Kelly’s statement “mathematically correct but fundamentally misleading.”

Karlsson said fares are usually quoted with taxes and fees included. So a $300 ticket would include a base fare of about $239.

Karlsson calculated that would trigger $61 in taxes and fees, which would still amount to 20 percent of the ticket cost, the same amount Kelly claimed.

But more importantly, Karlsson said, the sample ticket that Kelly uses is not typical:

The typical domestic flight in the U.S. costs $418 (as of 2011), not $300.

Two-thirds of all domestic tickets sold do not include connecting flights, but rather are nonstop, so they incur fewer federal fees.

So a $418 nonstop ticket would include $54 in taxes and fees, or just under 15 percent of the total. (The taxes and fees in Kelly’s $300 ticket example, if the trip were nonstop, also would equal just under 15 percent.)

That means the first part of Kelly’s claim is accurate but leaves out important details.

Taxes and fees on other products

As for the second part of Kelly’s statement, the Southwest spokesman cited a 2011 column in The Wall Street Journal by the chief executive officer of Airlines for America. The column said the taxes paid by airlines are at the “same excessive levels” as “sin” taxes imposed on alcohol, tobacco and gambling.

But the column provided no figures to show how the various tax rates compare.

We found the following figures from the federal Alcohol and Tobacco Tax and Trade Bureau, a division of the Department of Treasury. They represent only the federal taxes on these products.

Product/Tax

Beer/5 cents per 12-ounce can

Wine/21 cents per 750-milliliter bottle

Distilled spirits/$2.14 (at 80 proof) per 750-milliliter bottle

Cigarettes/$1.01 per 20 cigarettes

Firearms/10 percent to 11 percent of sale price

Some brands of beer cost more than others, some wine costs more in one part of the country than another, buying in bulk costs less, etc.

But, to consider some examples, if a:

• Six-pack of beer costs $6 at the store, 30 cents of that — or 5 percent — would be the federal tax.

• Bottle of wine costs $8, the 21-cent tax amounts to 2.6 percent.

• Bottle of 80-proof tequila costs $15, the tax is 14.3 percent.

• Pack of cigarettes costs $9, the tax would represent 11 percent of the cost; although if the pack cost $6, the tax would amount to nearly 17 percent of the cost.

None of this takes into account state and local taxes.