One Airline Adds $27 To Your Ticket For “Technology” – But There’s An Old School Way To Beat The Fee

This has to be the most absurd fee ever charged by an airline. Startup carrier Breeze Airways, founded by the creator of JetBlue and several other airlines around the world, will hit you with a $27 “technology development fee” when buying a ticket. The reason why – and how to avoid it – will really take you beyond the looking glass of the U.S. airline industry.

How on earth can you be charged an extra fee for ‘technology development’? Isn’t the fare buying your air travel, and if the airline needs to invest in technology to deliver your travel that’s just part of their costs? Why not an ‘engine surcharge’ or a ‘gate fee’?

In fact what Breeze is doing really isn’t different than the tactics of other ultra-low cost carrires in the U.S. Spirit Airlines, Frontier Airlines, and Allegiant all charge extra fees for booking their tickets online. Oh, and they also charge fees for booking by phone. Ludicrous, right?

  • It’s their cash register. It’s how they sell a product. Supermarkets and hardware stores don’t charge separate “cash register fees.”

  • You can avoid paying these fees by buying your ticket at the airport. Almost no one does this because it’s time consuming, and you have travel costs (and if you drive, parking costs) as well.

  • It’s more expensive for an airport agent at a ticket counter to sell tickets than to sell them by computer online. Don’t these airlines want to encourage customers to book online?

Years ago airlines used to award bonus miles for online bookings. Hotel chains sometimes offer bonus points for making bookings through their app. Pushing customers to self service modes holds down costs (and encouraging them to book direct rather than through an online agency saves commissions or override expense).

So why do ultra low cost carriers make it cheaper to buy tickets at the airport? Glazer’s Law actually holds here. The reason is taxes (and regulation).

  • Airlines want to move as much of the cost of a domestic ticket into fees as possible. That’s because domestic airfares are subject to a 7.5% excise tax. Anything that’s a fee, from seat assignments to checked baggage fees, avoids this tax.

  • Calling part of the cost of a ticket a ‘booking fee’ or a ‘technology fee’ saves taxes on that part of a ticket.

  • However the Department of Transportation requires that for something to be a fee, it must be optional. If hotels were regulated by the DOT they couldn’t have non-optional resort fees, all mandatory costs would have to be included in the room rate.

  • The online (and telephone) booking fees are optional, because customers can avoid the fees by buying at the airport. The same turns out to be true for the technology fee. It’s optional, and you can avoid it by ticketing at the airport.

Now it all makes a lot more sense why ultra low cost carriers will sell you tickets for less at the airport than they will online. You save the online booking fee and in the case of Breeze Airways, the technology development fee. And they do this because it saves them 7.5% tax on the amount of the fee for everyone else who doesn’t go through the hassle of airport ticketing. 7.5% of $27 is an extra $2.02 in Breeze’s pocket on every single ticket they sale, thanks to tax arbitrage.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Good explanation of the tax dodge. But I am as likely to fly Breeze Airways as I am Ariana Afghan Airlines.

  2. So it’s a crap shoot if there will be seats available on the flight you want if you wait to buy your ticket when you are ready to fly or can you make a reservation and pay for it a hour or so prior to the flight ? No thanks, not for me.

  3. C_M for the win!

    Also potential ticket buyers should feel free to ask on the phone: “So is the $27 technology development fee for you to hire cut-rate coders in the Indian subcontinent who are paid in rupees to ‘develop’ your website?”

    Feel free to mute the phone and snicker out loud while you hear the response.

  4. I wouldn’t suggest a dedicated trip to the airport to buy a ticket (much less a day-of purchase), but if you’re already flying and know you need to book a ticket, it can be worth stopping by the Breeze/Spirit/Frontier counter as these fees are per person per leg.

  5. The law should be changed tomorrow to make airlines pay their fare share of taxes. Billions in lost tax income

  6. Same reason we have resort fees and destination fees. They will disappear if taxed like ticket or room.

  7. @beachfan, not the same reason as resort fees. Resort fees are taxed just like room rates, but for hotels, they can hide the resort fee where airlines can’t, so they do it to deceive, not to avoid taxes

  8. farnorthtrader – You are 100% correct. Personally, I never have -or will- pay a rip off “resort” fee – it is just another gouge for things one used to get included in the room price. Corporate bean counters have to justify their jobs by being devious – these “fees” add noting to the customer and only benefit the bottom line.

  9. Everyone on here has it wrong. Yes the various fees on ULLCs are crazy but don’t pick them apart. The key is what is the TOTAL cost to fly, regardless of how it is described. IMHO this is different than hotel resort fees which in many cases are a straight rip off (thank God I’m at a level where I don’t pay hardly any of them). ULLCs, as Gary so well described, tease apart the various components of their fares to minimize taxes (as any well run business should do). It is all about the TOTAL cost and what you get for it.

    I’m now retired but have flown enough in the past 35 years to get over 8 million frequent flyer miles (vast majority butt in seat miles versus credit card max spend or similar such methods). I’ve flown first and business class on some of the best airlines in the world. However, I have no problem taking a flight on Frontier for 1/3 the cost of American (for example) if the flight is only 1-2 hours and non-stop. I set my expectation for the flight and am fine. Flying is, in many cases, simply a way to get from point A to point B and not an experience on its own (at least US domestic flights) so I fly who I want in whatever class I want based on cost, convenience, FF point value, etc. Anyone that wouldn’t fly Breeze due to them breaking out a $27 technology fee is crazy. If a business trip and you get reimbursed fine – it doesn’t matter. However, for a quick personal trip I don’t care what they call the fee if, once again, the TOTAL cost is half a legacy “full service” airline

  10. AC – I KNEW that some ignoramus would post EXACTLY what you posted. People are so stupid to accept this ignorant excuse in light that they have been deliberately and deceptively scammed and end up paying more for a product/service than what they were originally told was the price. You are a classic example of one of those who apparently enjoys and pays extra to be lied to.

  11. After adding The technology Fee bag fee Seat fee toilet fee a ticket from the east coast to Los Angeles
    Is cheaper on American airlines then this breeze airline

  12. It’s about time that all these ridiculous fees get taxed as part of the airfare. It’s loopholes for them and that should be closed. And Gary, don’t give them ideas of an “engine fee” or “gate fee”. Next thing you know they will charge a “jetbridge fee” (of course you can avoid that fee by not using a jetbridge and instead use airstairs outside. Jeez…`

  13. @Chad MC – I’m pretty sure Ryanair already does this – they load passengers by stairs instead of jetbridges to avoid the jetbridge fee airports charge.

    @AC – You are correct, it’s total charges one should care about, but I’ve rarely found ULCC are all that low cost when you compare apples to apples. I’ve flown Frontier a few times because they just happened to go where I wanted at a time I wanted non-stop and I could avoid all their little fees. (I have never seen a reasonable Frontier connecting flight.) I’m flying Ryanair in Europe in a few weeks because they’re offering the only nonstop to my destination, and that’s one of the reasons I chose the destination, but it’s not terribly cheaper, especially when you need to make sure you avoid penalty fees for doing something outside the rules, like needing to print your boarding pass at the airport. Flew them in June on a short hop and checking in alone was a horror show. Most of the time it’s just easier to stick with the airline I’m aiming for/have status on. My time and stress level is worth something, so please assign a value for those to the total charges on ULCC.

  14. Does this mean that I can avoid Alaska Airlines Partner Booking Fee by booking at the airport?

    What is to stop airlines from having two opposing fees so you have to pay one? Like, Airport Booking fee $25, or Phone booking fee $25? you can avoid one but not the other.

  15. I am not sure purchasing your ticket at the airport is an option. Most of the ULCC’s outsource their station handling – except in “hub” airports (they really don’t have many) and these station reps are not skilled at issuing tickets. It is a very different function from simply checking in a passenger.

    Case in point – we were recently stranded in an airport and the best option was DL at the last minute – no time to book oniine – the airport wifi was spotty – so we go to the counter to purchase walk-up fares as we had to travel. The agent was clueless about how to book and ticket a pnr.

    Highly doubt a contracted airport agent could book a ticket on Sleeze.

  16. Sure you save $27 buying at the airport, but you then have to pay $50 for a boarding pass not printed at home. Or something like that.

  17. I don’t understand how the airline benefits financially by avoiding transportation tax. The passenger gets this benefit of avoiding transportation tax. It might make the ticket look cheaper online, which is a benefit to the airline.

  18. I tried to save the fee on Frontier by taking a dollar bus ride to MCO on 3 round trip tickets. When I got there, the first agent didn’t know anything about it and the ticket was actually more expensive than on line when she tried to process it. She called the manager over who claimed that they no longer remove any fees for airport purchased tickets beginning “a few weeks ago”. So now Frontier is denying your option to remove these “optional” fees.

  19. The one that still pisses me off the most is U-Haul’s mandatory environmental fee. Are they regulated by DOT? Because everyone I talked to there has always told me it’s mandatory.

  20. @Jojo. If you think airlines are not paying their fair share of taxes, then you are unaware of the costs breakdown of an airline ticket.

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