Northwest raises fares as it no longer absorb PFCs
Northwest Airlines announced this week that it has discontinue its policy of absorbing Passenger Facility Charges (PFC). The government levied PFCs vary by airport and can add up to $18 on a roundtrip ticket.
In a memo to corporate and travel agency clients, the airline said it previously shielded passengers from these charges by marking down base fares “to remain price competitive with connecting hubs that do not have PFCs.” In addition, Northwest raised fares by as much as $4.50 each way for itineraries that connect through airports that do not levy PFCs, reported Business Travel News.
Northwest also increased by $4.50 prices on certain nonstop flights to avoid underpricing connecting services.
Continental in late 2003 similarly ceased absorbing PFCs on connecting itineraries that generated more than $6 in government-imposed segment fees.
Some carriers still absorb PFCs, but given the current economics of the industry and Northwest, it can no longer sustain the practice.
Charles Kao
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