Airlines start to roll back prices

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DALLAS --- Airline travelers are finally catching a break. Even though the government is taxing tickets again, the total cost to consumers is staying about the same.

That's because airlines are rolling back prices to where they were before the government temporarily lost its authority to tax tickets two weeks ago. The difference can add up. Federal excise taxes, which went back into effect Monday morning, add more than 7.5 percent to the cost of a flight.

Southwest Airlines Co. and its AirTran Airways subsidiary lowered fares Sunday and were matched by Delta Air Lines Inc., AMR Corp.'s American Airlines, JetBlue Airways Corp. and others.

United Continental Holdings Inc., the world's largest airline company, held out until Monday afternoon before reducing fares. US Airways Group Inc. was still charging the higher prices, a spokeswoman said Monday.

Most airlines raised fares after a standoff between Republicans and Democrats in Congress on funding for the Federal Aviation Administration caused federal excise taxes on tickets to expire July 23. In effect, the airlines grabbed the money that previously went to the government instead of passing the tax break to consumers.

By raising fares to offset the expired taxes, airlines were able to pocket an estimated $400 million in just two weeks.

Last week, Congress approved reviving the taxes through Sept. 16. The IRS gave the airlines until the end of the weekend to resume collecting the fees.

Rick Seaney, the CEO of FareCompare.com, said it wasn't surprising that airlines couldn't risk raising prices 8 percent to 15 percent on financially stressed consumers.

Tom Parsons, the CEO of Bestfares.com, said economic turmoil could force airlines to do more than just cancel last month's increase.

"They have to be concerned over (travel demand in) the fall," he said. "They may still have to bring fares down further."

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