Base Fare
The base fare here is $957. This is a round number, unlike the domestic one from yesterday because when an airline files a base fare internationally, it’s just that and doesn’t include any tax. That’s also because there is no percentage tax internationally.

Airline Surcharge (YQ)
Yesterday, we talked about airline surcharges and those are often filed like a tax under the code YQ. In this case, Delta has filed a $360.40 YQ charge that it is calling an “International Surcharge” on its website. Sometimes it will be called a fuel surcharge, but the name can vary. This is money kept by the airline. It wouldn’t be taxable if there were a percentage tax, but since there isn’t one internationally, that’s not relevant.

US International Transportation Tax (US)
As in the domestic example, there is a federal US tax but it’s not a percentage. It’s currently $16.70 each way, so you can see here that the total US is $33.40.

US Customs User Fee (YC)
This charge is collected by the government to support customs inspection functions at $5.50 per entry into the US.

US Federal Inspection Fee (XY)
This charge is collected by the government to support immigration inspection functions at $7.00 per entry into the US.

US APHIS User Fee (XA)
This charge is collected by the government to support plant and animal inspections at $5.00 per entry into the US.

US September 11th Security Fee (AY)
This charge might look familiar because it’s charged on domestic flights as well, but there is a trick. This only applies to flights departing from the US so on this one, it only gets charged once at $2.50 since the return leaves from Tahiti.

Passenger Facility Charge (XF)
This one is the same as it is domestically. Departures from US airports with the fee in place are charged up to $4.50 per departure. In this case, LAX charges $4.50.

And those are all the US taxes and fees. What else is in here? You’ll see a PF charge of $15.60 and an FR charge of $17.60. Since this flight is international, the US isn’t the only one charging fees and taxes here. The PF charge is a local departure tax for French Polynesia while the FR tax is a French tax since French Polynesia is still part of France.

I picked this example because it’s quite simple with very few taxes. It’s not uncommon to see far more than this. It gets so complex, we’ve even had a few tickets we’ve issued that have had so many taxes that Delta’s system couldn’t handle the length of the fare calculation. Crazy stuff. How about this one with United and Lufthansa, for example?

 
This trip is from Cairo to Frankfurt, then on to London, over to LA, and then back to Cairo. The alphabet soup of taxes is incredible. There’s also added complication here because since it starts in Cairo, the fare is in Egyptian currency. But since we’re in the US, the system converts it to US Dollars. I won’t go through each tax here because we’ll be here all day, but I think you get the point.

Below you will see a screenshot of a raw pricing display in Sabre for a roundtrip ticket from LA to Ft Lauderdale with a stop in Vegas on the way out but a nonstop return. All flights are on Spirit Airlines. This might look like something in a foreign language, but you’ll get it once we’re done breaking it down.

 
Base Fare
You can see a base fare of $307.89. That’s the money that the airline keeps but it’s a number you have almost never seen as a traveler. What you used to see until rules changed recently to show only the final price was a $331 fare plus tax. That fare included both the base fare and the US Domestic Transportation excise tax (see below). Please note that if you look toward the bottom at the line starting with LAX, you will see a “Q95.81″ charge there. That is a fuel surcharge of $95.81 that is included within the base fare of $307.89 so it is taxed just like the fare. Spirit shows this on its website but otherwise you wouldn’t know it was there. I haven’t seen fuel surcharges applied another way domestically, but we’ll talk about how you see it internationally on Thursday.

US Domestic Transportation Tax (US)
As mentioned above, on all domestic tickets, there is a 7.5 percent tax that the federal government keeps. In this example, you can see the US tax is $23.11. Combined with the base fare, it’s $331 and that’s the fare that the airlines file in the system.

Segment Tax (ZP)
Next to the US tax, you’ll see the ZP tax. Several years ago, the feds lowered the excise tax to 7.5 percent from 10 percent and in the process added a segment fee so that taxes were distributed a little more evenly between cheaper and more expensive tickets. That tax revenue is kept by the government. Today, the charge is $3.80 per flight segment, but it periodically increases. Since we had three segments in this itinerary, it’s $11.40 total.

US September 11th Security Fee (AY)
In the last decade, the US has nationalized security as we are all well aware. To pay for this, there is a $2.50 charge per flight with up to two charges each direction. That’s why you see the AY charge of $7.50 here. Now, if we had two connections (three flights) on the way out, it wouldn’t go any higher because of the cap. This fee is kept by the federal government.

Passenger Facility Charge (XF)
The Passenger Facility Charge is an airport-specific charge that can be up to $4.50 per departure from each airport. Not all airports charge this, and they can charge less than $4.50 but it has to be approved before charging the fee. There was a recent effort to bump this up to $7.50 but it failed, so the cap remains. The money goes to airports for capital projects. In this itinerary, it’s $13.50 and you can see the breakdown in the fare calculation line below. If you look toward the bottom, you’ll see that there are three charges of $4.50 for when the passenger departs Los Angeles, Las Vegas, and Ft Lauderdale.

That is it for domestic charges. Pretty simple, right? You will see something that says XT in that screenshot, but that’s just an aggregation of all the taxes and fees. The total XT here is $55.51 for a total out of pocket cost of $363.40 for the purchaser.

If you look below that, you can see the fare bases which start with V going out and R coming back. That’s how the airline tie fares with fare rules, but it’s definitely a topic for another post.

There are a couple of little caveats to this system here. First, what counts as a domestic trip? If we turn to the IRS, we can see that it’s, of course, any trip between two US points. But it also includes trips within 225 miles of the US border in Canada and Mexico. That includes most major Canadian points.

One other odd little quirk. This only partially applies for travel between the Continental US and Hawai’i and/or Alaska. In those circumstances, the domestic tax only applies to the part of the transportation that occurs within 3 miles of the US (or 225 mile border) and when it enters Hawai’i and/or Alaska. So if I look at an LA to Honolulu ticket costing $2211.34, the domestic tax is only $0.66. That’s because nearly all of the flight occurs outside the taxable area. There is, however, an additional international facility fee that is charged. I won’t get into too much detail on this one, but just realize it’s a blend of domestic and international tax when it comes to Alaska and Hawai’i.

Like I said, on Thursday, we’ll talk about international tickets.

The DOT has now decided that fuel surcharges “must accurately reflect the actual costs of the service covered.” What exactly does that mean? Well, if you read the text of the notice from February, you’ll see it explains that the fuel surcharge must “reflect a reasonable estimate of the per-passenger fuel costs incurred by the carrier above some baseline calculated based on such
factors as the length of the trip, varying costs of fuel, and number of flight segments involved.”

In theory, this effort makes some sense. If an airline is going to have a fuel surcharge, then it should be directly tied to fuel. But in practice, this is impossible, it’s just going to create more work, and there is zero impact on the customer. Seriously. Here’s what a fare display looks like on Delta.com right now:

Do you know what the fuel surcharge is, if any, on this ticket? No, because it has been years since airlines were allowed to display a price net of surcharges. Anyone who says, “I saw a $400 fare but then they tried to screw me with $400 in surcharges” in recent years is either lying or not from the US. That hasn’t been legal here in years. If there is a surcharge, it’s baked into that price anyway.

What will the airlines do with this clarification? They’ll probably kill fuel surcharges, since we all know that it’s just about impossible to get a reasonable estimate on the price of fuel. It can take pages just to explain an airline’s hedging strategy, and the idea that an airline could know months in advance how much fuel will cost is silly.

So what will happen instead? They’ll just change the name. In that Delta example from above, here’s the breakdown that you’ll see only if you click the link for the specific fare breakdown:

See that “International Surcharge”? It’s filed the same way as other airlines file a fuel surcharge but it just has a different name. And since this flight is international, it’s not lying to say that it’s an international surcharge.

In other words, nothing is going to change. You aren’t going to see some huge windfall with ticket prices plunging or anything like that.

I know what you’re wondering. Why not get rid of this silliness and just increase the base fare instead of using a surcharge? It’s mostly because it’s just easier to do it this way. The way the systems work, it’s so much easier to just slap on a surcharge than it is to change a bunch of fares or even file new ones in thousands of markets.

For most travel purchasers, there is no difference anyway so it shouldn’t matter which method the airlines use. The only potential impact is for those corporate clients that have discounts which apply to the base fare but don’t apply to fuel surcharges. But that’s a business issue and certainly nothing for the regulators to get involved with.

In short, this will mean absolutely nothing for the average traveler, but it will probably give the DOT a reason to hire a bunch of new audit employees. Meanwhile, the airlines will just ditch “fuel” surcharges and replace them with something else. What a waste of time and effort.

Don’t be Fooled by Hawaiian Air’s “Stellar” On-Time Performance – Conde Nast Daily Traveler
Hawaiian consistently finishes at or near the top of the on time charts, but this is really a tale of two airlines. The overwater operation isn’t so great.

In the Trenches: Working From Home with a Child – Intuit Small Business Blog
Turns out that working from home with a child is a challenge. Who knew? Hah.

Congress is responsible for reauthorizing the FAA every few years. That reauthorization sets funding levels for a variety of projects and it sets priorities. So, when Congress can’t stop jerking around, the FAA sits and spins, waiting to do the work it needs to do until Congress lets it.

There have been a variety of hold-ups over the years, but a compromise has finally been reached. Yesterday, the Senate approved the bill that the House had already passed. You can read the entire mind-numbing 374-page bill on your own, but I thought I’d go over some highlights.

NextGen is Coming (Title II)
The biggest victory for absolutely everyone is a solid plan to finally implement “NextGen” air traffic control. There was even some acceleration of the program here. Without getting into details, NextGen will eventually replace the existing air traffic control system with something more modern. It will ultimately allow for more direct routings, fewer delays, and greater levels of safety.

On a related note, the redesign of the airspace surrounding New York City and Philly will also push through thanks to this bill. That means more efficient routings and fewer delays in the most delay-prone region in the US.

Minor Cuts to Essential Air Service (Title IV, Subtitle B, Section 421)
For those who have been closely following the Essential Air Service (EAS) program, there were some cuts there, but as usual, the cuts ended up being pretty minor and irrelevant to most. The new rule is that if an airport in the lower 48 states receiving EAS funding boards fewer than 10 people per day, it will lose funding UNLESS there is no other medium or large hub (defined by the FAA as having at least 0.25% of boardings in the US) within 175 miles.

Of the 109 airports in the Continental US that received EAS funding in 2010, 36 board fewer than 10 people each day. Pretty big chunk, right? Not so much. Only 9 of those are less than 175 miles from a medium or large hub airport, so the impact is minor. (Cities on the chopping block are Jonesboro, AR; Kingman, AZ; Merced, CA; Athens and Macon, GA; Hagerstown, MD; Bradford and Oil City/Franklin, PA; and Jackson, TN.)

More Perimeter Exemptions at Washington/National (Title IV, Subtitle A, Section 414)
One change that will appeal to DC travelers is the expansion of the perimeter rule exemption. As you might know, flying from Washington/National is limited to airports within 1,250 miles except for a handful of slot exemptions that can go further. This reauthorization will add 8 more roundtrip slots that can go beyond the perimeter.

Half of those must go to new entrants or “limited” incumbents who have very little service already. I assume we’ll see Alaska, JetBlue, Frontier, Southwest, and Spirit vie for those. For the other four roundtrips, the big guys can get the slots, but they can only get 1 roundtrip each and they have to convert an existing in-perimeter slot to use it. I’m quite interested to see how that might work. Maybe United wants to fly to San Francisco, but other than that, I imagine the airlines mostly want to use the slots to go to cities they already serve with existing perimeter exemptions.

Beyond the above changes, the airlines have to be really happy with this bill. They had several victories:

• No increase in the $4.50 cap on Passenger Facility Charge (PFC) that airports can levy. Airports were looking for an increase to $7.50. Airport improvement funds also stay flat despite an effort by airports to see that increased.
• No rules requiring inspections of foreign repair stations were mandated. Some groups were hoping to require inspection for safety reasons. The legality of that was questionable, and it would also likely reduce the attractiveness of outsourcing.
• No restrictions on joint ventures or alliances. Some were pushing for expiration of immunity with periodic reviews required to maintain it.
• The 3 hour tarmac delay rule was not put into law but will just remain a DOT regulation (which is easier to get changed). It is, however, now required that emergency contingency plans are filed for dealing with these types of problems, however. That’s a good thing.
• In a nod to the fight over unionization, this bill requires unions to get 50 percent of potential members to sign a card for election, up from 35 percent. This is at best a very minor victory for airlines, but I honestly don’t think it matters much at all.

Beyond that, there are a bunch of odds and ends in the bill. Things like banning pilots from using personal wireless devices in the cockpit and regulating the carriage of musical instruments show just how deep into the weeds this can get.

As usual, the bill also puts out requirements to study a lot of different things. No action required, but just studying. This includes a study on alternate ways to charge for PFCs outside the ticket price, a study of air quality in aircraft cabins (long overdue, if you ask many flight attendants), a study of the tarmac delay rule, a study of cell phone use on airplanes, and a study looking to increase intermodal travel. I imagine most of these studies will lead absolutely nowhere.

In the end, this is long overdue, and it will help get a lot of important work moving, in particular that relating to NextGen air traffic control.

Airline Fee Changes Require Full Disclosure – NBC Los Angeles
I met up with the folks at NBC4 here in LA to walk them through some of the changes from this week’s DOT rule change. Here’s the video:

View more videos at: http://nbclosangeles.com.

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Tired of waiting behind the unwashed masses which never seem to be able to separate themselves from their bottled water, belts, liquids and shoes at security checkpoints? If you’ve put off submitting an application for US Customs and Border Protection (CBP) trusted traveler program, you now have another reason to stop procrastinating.

The TSA has opened expedited screening lanes at several major airports around the country. The “PreCheck” program started with a limited trial at selected locations last October at DFW, Atlanta, Miami, and Detroit. Originally open only to top-tier American and Delta Air Lines passengers who were already members of one of the CBP’s Trusted Traveler Programs, PreCheck has now been expanded to include any passenger who holds Global Entry, SENTRI, or NEXUS approvals to enter the country.

More than 140,000 travelers have already been screened at the pilot checkpoints. The program was expanded recently to include passengers traveling on Delta from Minneapolis/St. Paul, American from Los Angeles International, and both carriers from Las Vegas McCarran. In January, US Airways Passengers will be able participate in the program at McCarran. United elite travelers will be invited to join in at some point in 2012 – approval is pending merger of Continental and United’s information systems are combined.

I’d been invited to join PreCheck last October as an American Airlines Premier Executive qualifying traveler. A last minute change of plans recently left me scrambling to catch a flight out of Miami on a stormy and congested Sunday night. Taking the finally-opened airport people-mover from the centralized car rental facility (a pleasant surprise), I checked in at an American kiosk and proceeded to the elite line at the airport’s D-Gates. After my boarding pass was scanned, I was directed to a nearly empty security line – another surprise – as I had been approved for expedited security screening.

Once at the screening checkpoint, I was told I did not need to take off my shoes, remove my belt, or my light jacket in order to pass through the screening device. I did not have to remove my “3-1-1” liquids from my carry-on bag, but I did have to remove my computer from the non-compliant bag. I was through security in under a minute, and on my way to the gate in time to download email before departure.

Qualifying for the Global Entry program requires applicants go through a fairly rigorous screening process in exchange for the right to bypass long immigration and customs lines at US International Airports. Anyone who has the correct credentials can now opt in to the PreCheck program by entering their clearance code in their airline’s security profile – as it is no longer necessary to hold top tier status once CBP approval has been attained.

According to US Transportation Security Administrator Joe Pistole, better information about travelers helps the TSA to say “Now, we don’t have to treat each person as a putative terrorist,” according to a report in Bloomberg Businessweek.

While I usually feel most TSA employees act professionally while doing a very difficult and demanding job, I have to admit to wondering if some screeners DO assume everyone is guilty until proven innocent. Traveling with my 88 year old father at Newark last fall, for example, pre-warning about his artificial hips and other ailments did little to lessen interrogation procedures which seemed inappropriate at best, and extreme considering his physical condition. Terrorist, indeed!

Gaining approval in a Trusted Traveler program is not an automatic procedure, even for those who travel abroad frequently. The process includes capture of fingerprints (done neatly and digitally) as well as an iris scan. For those concerned about information captured from the microchip contained in today’s US passports, questions of privacy may prove to be enough to discourage registration. But compared to biometric data collected by other countries, the tradeoff might seem less onerous – I have saved countless hours of standing in line at increasingly congested gateways. The PreCheck program was an unexpected and welcome surprise.

Applicants should also be aware they will be subjected to an extensive, face-to-face interview at one of the TSA’s International Airport Offices. I faced a 30-minute interview inquiring into my reasons for travel to over 50 countries in the past ten years. As a self-employed individual, I also had to supply a copy of my most recent tax return. An unfortunately, I paid my own registration fee before American Express announced it would reimburse its Platinum Card holders for the cost of the Global Entry program – where approval is valid for a period of five years.

Would I register today knowing how much information was eventually collected? Certainly! It should also be noted there is no guarantee any given passenger will not face more extensive random security checks, whether entitle to PreCheck or not. With as much as I travel, the benefits easily outweigh my concerns – and with PreCheck expanding throughout the country, I’m looking forward to more pleasant surprises.

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Rob Lipman is Executive Vice President of Summit Management Services, an international meeting planning company specializing in pharmaceutical research and incentive programs. He logs approximately 200,000 miles a year and visits at least five continents annually. He is an avid Cranky Flier reader and professes to be in search of “new airline experiences” and the perfect flight.

Guest Post: Top 10 US Airline Stories of 2011 – Bangalore Aviation
The guys at Bangalore Aviation asked me to do a guest post for them on the top stories of 2011 in the US regarding aviation.

In the Trenches: Tipping – Intuit Small Business Blog
We had a very happy client recently who decided we had earned more than we charged him. I had to figure out how to handle it.

The new rules don’t go into effect for a couple of years, but the impacts will likely start being felt sooner than that. After all, when pilots are given more rest, that means the airlines need more pilots to fly their schedules. So the airlines will need to start ramping up before the rule becomes law just to make sure that they’re in compliance. How many more pilots will an airline need? It’s hard to know since every airline is different. It’s not like they’re going to need to double the number of pilots they have or anything, but there will need to be more. Combine that with the end of the retirement holiday we’ve been living under for the last 5 years, and there are going to be a lot of job opportunities for pilots. (When the retirement age for pilots was raised from 60 to 65, that meant 5 years where no pilot would be forced to retire, and we’re getting to the end of those five years.)

Of course, when airlines need to hire more pilots to fly the same schedule, that means costs go up. Again, I’m not saying this is a bad thing. It’s just the way it is. So why do I say that small cities will be hurt most here? It has to do with the Flight Duty Period (FDP).

Today, pilots can be on duty up to 16 hours straight, and that’s called the Flight Duty Period. During that time, they can actually fly up to 8 hours (or more if there are unforeseen circumstances). Now, those numbers are changing depending upon when they fly and how many flights they have. So if a pilot comes on duty between midnight and 4a, then he can’t be on duty for more than 9 hours no matter what. If he comes on duty between 7a and noon, then he can max out at 14 hours on duty because that’s more normal for the body’s clock. (There are adjustments required depending upon how long the pilot has been in that time zone.)

But even if the pilot comes on duty at 8a, he can only be on duty for 14 hours if he has no more than 2 flights during that time. It slowly decreases the amount of time he can be on duty until you hit 7 flights. At that point, he can be on duty no more than 11.5 hours.

See how this is coming together? Small cities are the ones served by short hops, and regional pilots have the grueling task of flying many short hops during the day. That kind of flying is exhausting, and that’s why it’s those pilots who are going to see the biggest gains in terms of rest. Costs will go up most as a percentage for the regional airlines, it would seem to me, and that again puts pressure on costs to small cities that are already in trouble.

The rest of the rules impact pilots more broadly. While pilots could actually fly only 8 hours in a duty period before, it’s now up to 9 hours only if reporting between 5a and 8p. Overnight operations are still capped at 8 hours, but it’s important to note that there is no exception anymore. These times are hard cut-offs now. This changes when you have additional pilots on board for longer haul flights, but the framework is roughly the same.

When it comes to rest in between duty periods, that’s changing as well. Today, rest can be as little as 8 hours between the time a pilots is released from duty until the time he’s back on again. That hardly gives the opportunity for adequate rest in many cases. The new rule is 10 hours between periods, and that’s designed so that pilots can get 8 hours of sleep. That won’t always happen of course, but it is an improvement in the rule. And pilot are supposed to tell the company if they haven’t had enough sleep during that rest period. (I imagine that sounds better in theory that what will actually take place.)

There are other rules as well but we don’t need to get into the weeds here. The point is that this will help pilots to be more rested, and that’s a good thing . . . at least, most pilots.

There is a crazy carve-out here that exempts cargo carriers from the new rules, as I mentioned up top. Apparently, the cargo lobbying group earned its money, because this seems impossible to justify in any normal situation. Last time I checked, cargo pilots had the same value to their lives as commercial pilots, so if a certain amount of rest is deemed necessary for commercial pilots, then it should be the same for cargo. It’s probably even more important for cargo since they do much more of their flying overnight, against their natural body rhythm.

So are these rules good? I’m not a sleep scientist, so I can’t comment on if this change is enough, but the method that they settled on – trying to adjust to the body’s clock – seems smart to me. Yes, there will be a cost increase, but at least pilots will be better rested. It does, however, mean there’s even more pressure on the already-struggling small cities.

Wi-Fi coming to international flights – CNN Out of the Office
More talk about what’s happening with United’s decision to put wifi on its international fleet.

First Fine for Tarmac Delays May Not Actually Help You – Conde Nast Daily Traveler
I didn’t write about the tarmac delay fine here, but over on Conde Nast I talked about how it’s not necessarily good news. (Regular readers here won’t be surprised by my stance.)

In the Trenches: Recovering From a Crash – Intuit Small Business Blog
Our web host crashed last week, and that meant we had to revert to a back up plane to keep our clients happy.