The impact of infrastructure-related taxes and fees on domestic airline fares in the US

Pricing congestion for arriving flights at Chicago O'Hare Airport

“…Even if the congestion fees were determined based on operations on the good weather day, they would generate daily revenues of between $3.3 million (based on a Cournot fee) and $5.6 million (if every airline pays the atomistic fee). There would clearly be sufficient extra revenue available to offset some or all of the federal taxes and fees (see Karlsson et al, 2004). Of course, all current fees and taxes do not vary by time of day, and moving to congestion pricing will provide incentives to reschedule flights.…”

Departure delays, the pricing of congestion, and expansion proposals at Chicago O’Hare Airport

“…Following the September 11, 2001 terrorist attacks, a Federal Security Service Fee of $2.50 per segment is also assessed. Airlines also pay a federal tax of 4.3b per gallon on jet fuel (Karlsson et al, 2004). Lastly, O'Hare charges airlines rent for the space they use in the terminals.…”

Hidden Baggage: Behavioral Responses to Changes in Airline Ticket Tax Disclosure

“…Their results are limited to very modest variation in tax amounts across a sample of 50 U.S. airports. Karlsson, Odoni and Yamanaka (2004) provide descriptive evidence on effective ticket tax rates for domestic U.S. airfares.…”