HOUSTON, Oct. 3 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL) today announced that, effective immediately, the airline will no longer reduce its base fare to compensate for the government-imposed segment fees. Previously, Continental reduced base fares whenever this segment fee exceeded $6.00. A segment is defined as a takeoff and landing.
This segment fee is charged in addition to the 7.5 percent excise tax on airline tickets, the federal security fee of up to $10.00 per roundtrip, and airport-imposed passenger facility charges of up to $18.00 per roundtrip.
In addition, the airline will no longer reduce its base fare to cover passenger facility charges of $4.50 per departure for customers connecting at Cleveland/Hopkins International Airport.
"For six years, Continental Airlines has reduced base fares to rebate customers for the cost of domestic segment fees, and for the cost of passenger facility charges at Cleveland, at a cost to the company of tens of millions of dollars each year," said a Continental spokesperson. "The current depressed revenue environment and the continued fall in average fares paid in recent years dictates this change. Customers will now see the full impact of taxation on their ticket purchases."
The cost of taxes and fees figure prominently, particularly for customers paying lower fares. For a customer buying a $151.50 roundtrip ticket on Continental to fly from Baltimore to Kansas City with a connection in Cleveland, for example, Continental collects a base fare of $105.11, with the $46.39 difference funding federal excise taxes, federal segment charges, federal security fees, and airport passenger facility charges.
Continental Airlines is the world's seventh-largest airline and has more than 2,200 daily departures. With 130 domestic and 95 international destinations, Continental has the broadest global route network of any U.S. airline, including extensive service throughout the Americas, Europe and Asia. Continental has hubs serving New York, Houston, Cleveland and Guam, and carries approximately 41 million passengers per year on the newest jet fleet among major U.S. airlines. With 42,000 employees, Continental is one of the 100 Best Companies to Work For in America. In 2003, Fortune ranked Continental highest among major U.S. carriers in the quality of its service and products, and No. 2 on its list of Most Admired Global Airlines. For more company information, visit continental.com.
SOURCE Continental Airlines
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