The Taxes That Raise Your International Airfare

Americans spend billions of dollars on airfare taxes every year. We analyze airfare costs of the fifteen most popular destinations, discover which ones imposed the heaviest airfare taxes on Americans, and discuss how you can avoid overpaying. 

Highlights

  • Airfare taxes could constitute as much as half of your total airfare (the Bahamas)
  • Airfare taxes are fixed fees that disproportionately make short-haul flights from the U.S have higher percentages of total fare being taxes
  • We estimated that Americans paid $3.5 Billion in taxes in 2014 to the top fifteen international destinations
  • Amongst the top 15 destination the United Kingdom imposes the largest fees, $145, while China is the cheapest with $14

Airfare Taxes and How They Impact the Cost of Flying

Airfare taxes, despite their name, are not collected by airlines, airports or any industry within the aviation business but rather by governments. Each government gives different purposes to their taxes, some of which are collected to reinvest in security, infrastructure, passenger service etc. We examined itineraries from the United States' three largest international carriers, American Airlines, Delta Airlines, and United Airlines when booking a round-trip, main cabin flight to each country's busiest airports. The graph below shows what percentage of a round-trip fare from New York's JFK is taxes, the green representing what goes to taxes, the blue being base fare and other airline charges.

 taxes

Taxes constitute 5% to 50% for your airfare, and no flights are affected more by this than the short-haul flights. We usually think of taxes as a rate, and intuition says the longer the flight, the more expensive it should be. Airfare taxes are instead, a flat amount imposed by the U.S and the country you travel to. As a result, taxes have a disproportionate impact on shorter and cheaper flights. Over 35% of the cost of a flight from JFK to the Caribbean, Mexico and Canada can be attributed to airfare taxes, while longer distance destinations like China have less than 10% of their airfare made of taxes.

How the Taxes Work in Each Country 

 The following goes into more specific detail of the amount of taxes each country imposes on American travelers. The chart below details the amount each country charges excluding the $63 taxes from the U.S. 

txs

Most Expensive Airfare Taxes

We rank the five most expensive out of the most popular destinations based on the absolute value of the taxes imposed on American travelers. All of the following countries will see visitors paying a minimum of $140 in total taxes. 

1) United Kingdom 

The United Kingdom (England, Scotland, Wales, and Northern Ireland), has the highest taxes of the fifteen countries. For Americans, this is unfortunate since over 25,000 flights went through just London-Heathrow in 2014. Overall, nearly 3 million Americans visited across the pond last year.

Worst Tax: Air Passenger Duty Tax 

The steepest of the U.K airfare taxes is the controversial Air Passenger Duty Tax, which is charged to people flying internationally from the U.K. As mentioned above, since its implementation in 1993, it has increased 539% in value, which hurts American travelers the most since the cost is determined by flight distance and cabin class. Americans flying out of the U.K in the main cabin can be charged upwards of $110 while those in first class $215.60. 

Other Taxes

The Passenger Service Charge is another tax that is more expensive than the sum of the taxes charged by other countries. It isn't as bad as the Passenger Duty Tax because it changes based on where in the U.K you fly out of. The cost of flying out of London-Heathrow is $60, but flying out Manchester is only $17. Other popular cities such as Edinburgh and Glasgow also have Passenger Service Charges similar to Manchester's. Even on the most expensive of fares, taxes can make up over 16% of the final ticket price, making flying out of the U.K an expensive endeavor.

Taxes Cost
Air Passenger Duty $110-$216
Passenger Service  $15-$60

2) Jamaica

Jamaica is a popular vacation spot for Americans, with over 1.3 million visiting in 2014. Perhaps not so coincidently, it is the 2nd most expensive in terms of taxes. Flying from the U.S round-trip to either of the two major airports at Montego Bay or Kingston can cost you over $150 in taxes including the U.S'. In a country where 50% of the GDP comes from tourism, the taxes are met with worry they will discourage travel to the Caribbean island. Whether that is true or not, the taxes to fly into Jamaica are certainly very high.  A tax that applies to all international flights, and scales according to which airport you visit. Kingston's is slightly more expensive at $24.43, while Montego Bay's tax is $21.85.  

Other Taxes 

Jamaica has a number of taxes, most built to contribute toward tourism. The largest is the Tourism Enhancement Fee, a flat $20 tax that goes to toward the country's Tourism Enhancement Fund. There is the Air Passenger Levy, similar to the UK's Air Passenger Duty, at $20, a Passenger Aviation Service Charge, a Passenger Facility Charge, Airport Improvement Fee, and a Travel Tax. 

Tax Cost
Passenger Service and Security Fee  $20-$25
Tourism Enhancement Fee  $20
Airline Passenger Levy  $20
Travel Tax $15
Passenger Aviation Service Charge  $8
Airport Improvement Fee $5
Passenger Facility Charge  $3

3) Germany

The art, history, nightlife and overall culture of Germany make it one of the most visited countries in the world, especially by Americans, and with United Airlines and its alliance with Lufthansa, direct flights can take Americans to essentially every major city in Germany. Unfortunately, this does not save you from incurring a high tax. 

Worst Tax: Luftverkehrsabgabe or Air Transport Tax 

German is a complex language, filled with words such as Luftverkehrsabgabe. This fee is imposed to all who leave Germany after at least twenty-four hours of staying. Like the Air Passenger Duty tax of the U.K, it increases with flight distance making it $45 for Americans. Unlike the U.K tax luckily, it does not increase with cabin class, so those flying first class need not worry of paying extra when leaving Germany. 

Other taxes

The Passenger Service Charge and Airport Security Charge can both combine for over forty dollars on a round-trip out of Germany. The Passenger Service Charge however can drop to as low as $9.50 when flying into Cologne as opposed to $36 when flying into Frankfurt. Unfortunately, with small airports like Cologne you will most likely have to stop over in another country which means adding their taxes to the bill. As always, it is a game of weighing convenience and cost; try several itineraries before deciding on one. 

Tax Cost
Luftverkehrsabgabe $45
Passenger Service Charge $9-$36
Airport Security Charge $5-$10

4) Dominican Republic

The Dominican Republic's taxes are similar to Jamaica's. In fact many of the popular Caribbean Islands use taxes to fund their tourism industries. As a result, this little Caribbean country is #4 on our list. A round-trip from the U.S can tack on over $140 in taxes to your vacation, upwards of over 30% of the total ticket cost. 

Worst Tax: Airport Infrastructure Fee 

The Dominican Republic charges you a flat $32.60 to help shape up their infrastructure. Essentially, you come to enjoy their beaches, you help build their roads and bridges. 

Other Taxes 

The Dominican Republic also has a $30 Airport Authority fee, and a $20 Dominican Republic Airport Departure Tax. Unlike the U.K, flying to a different airport will not give you a lower tax. If you need to take a connecting flight , you will save money by connecting within a U.S airport. Flying through two Dominican airports can double the Airport Authority fee. 

Tax Cost
Airport Infrastructure Fee $33
Airport Authority Fee $30
Airport Departure Tax $20

5) Bahamas

Continuing the theme of Caribbean countries, the Bahamas is the fifth most expensive of the fifteen most visited countries. Your already expensive vacation can see an additional $140 in taxes. 

Worst Tax: Airport Facility Fee 

The Airport Facility Fee is a fee of $33.60 charged for essentially using an airport in the Bahamas. 

Other Taxes 

The Passenger Departure Tax is the next largest charge at $29 followed by two smaller security fees at $12.50 and $3.50. Although it does not matter which airport you fly into, Lyden Plinding Intl. in Nassau receives nearly eight times as many direct flights than the next airport at Grand Bahama Intl. from the U.S. As we have discovered, Caribbean countries can be expensive to fly to and you would not want to stop in one on your way to the Bahamas. If you can fly directly, you can save yourself from spending even more money on taxes. 

Taxes Cost
Airport Facility Fee $34
Passenger Departure Tax $29
Security Fee $3-$13

Least Expensive

The following are the five least expensive countries in terms of their airfare taxes; ordered from least to fifth least. 

15) China

The most visited Asian country, China imposes the most lenient taxes of any of the fifteen countries studied. 

Worst Tax: Airport Fee

China's only tax is the $13.50 to $15 Airport Fee. Beijing International and Guangzhou Baiyun International have a $15 charge while Shanghai Pudong International is $13.50. The downside to China's taxes is that each airport you visit adds its own Airport Fee. For American travelers this can be troublesome because of less direct flights to airports outside of Beijing and Shanghai. Connecting through two Chinese airports can mean $30 worth of Chinese taxes not including the American taxes. We explain below in the strategies section how booking with certain airline carriers can actually end up making China the most expensive country to fly to. 

Taxes Cost 
Airport Fee  $13-$15

14) Japan 

Japan is the 2nd most visited Asian country by Americans and the 14th most overall. Like the Netherlands, Delta has a hub in Tokyo-Narita International Airport which serves many one way flights from the U.S. To be clear, although Japan is third cheapest in terms of taxes, the base fare from the US to Japan, especially from the East Coast, is one of the highest of any fares, so it's a good thing the taxes are low. 

Worst Tax: Passenger Facilities Charge

A simple $17.30 fee is used to maintain Japan's airports and facilities. Interestingly it only applies for those flying out of Narita or Haneda in Tokyo - all other Japanese airports do not charge the fee. If you are flying to Osaka or Sapporo through Tokyo, you only get charged once. That's good considering those tickets can be upwards of $2,000. 

Other Taxes

The Passenger Security Service Charge is another cheap security tax, constant at all airports at $4.30. An important thing to consider with Japanese airfare taxes however does not even concern traveling into Japan, but rather from it to other Asian countries. Every flight through Tokyo will be charged the full extent of the taxes. People flying into Korea through Narita will receive an extra $21.30 tacked onto their already expensive trip.

Taxes Cost 
Passenger Facilities Charge $17.30
Passenger Security Service Charge $4.30

13) The Netherlands 

The Netherlands is one of Europe's smallest countries but hosts one of its most important airports, Amsterdam Airport Schiphol. AMS is a hub for Delta Airlines, and many flights will pass through AMS on their way to Europe or Asia. Fortunately for the 700,000 Americans who visited Holland last year, they weren't taxed heavily. 

Worst Tax: Passenger Service Charge 

The Passenger Service Charge is "relatively" the worst, costing about $14. The Netherlands is such a small country, that travel, especially direct travel, to any of its other airports is rare and difficult. 99% of all American travel to the Netherlands went through AMS in 2014. Thus the $14 may be considered a constant charge as any travel to the Netherlands will most likely be through AMS. 

Other Taxes

A Security Service Charge worth $12 is used to fund airport security while the Noise Isolation Charge, a low $0.50, is used to reimburse those under noisy flight paths in the tiny country. Amsterdam presents European travelers with a great option for connecting flights because of its relatively inexpensive airfare taxes. Flights connecting in CDG in Paris for example are much more expensive than those stopping in Amsterdam. The Netherlands is also connected by multiple sources of transportation to the rest of mainland Europe. Since Delta operates so many direct flights into Amsterdam it can be a great way to save money on a direct flight, and use Amsterdam as your base to travel through Europe.

Taxes Cost 
Passenger Service Charge  $14
Security Service Charge  $2
Noise Isolation Charge $0.50

12) Canada 

With over 3 million Americans flying there in 2014, Canada was the 2nd most visited and is the 4th cheapest in taxes. Canada is a little bit more complex however when calculating how much tax you will be charged as we explain more below.

Worst Tax: Airport Improvement Fee 

Canada follows suit with many other North American countries with a fee to maintain their airport infrastructure. Throughout Canada it can range from as low as $10 to as high as $22 such as in Calgary International Airport.

Other Taxes

Canada has ten provinces, some of which have their own charges, so things can get a little complicated. All the provinces charge the $9.30 Air Travelers Security Charge. Quebec however, imposes a Sales Tax which increases with fare price. Nova Scotia has a Harmonized Sales Tax, and Alberta and British Columbia have a Goods and Service Tax. All of these taxes are based on a percentage of the fare, but generally range from $0.5 to $5. What makes Canadian taxes even more interesting however are American taxes, specifically the Transportation and Segment Taxes. The transportation tax is a 7.5% tax of the fare on domestic flights and to cities 225 miles from the border of Canada and Mexico. For other international flights, the tax is generally capped at $35, but not for cities within that zone, and it just so happens that the vast majority of Canadian cities are within it. Thus a $213 flight from New York to Montreal and a $557 flight to Vancouver will have a $15.98 and $41.78 transportation tax respectively. Another American tax is the Flight Segment Tax, which costs $8 and applies to all domestic flights and of course, flights to Canada and Mexico within the 225-mile zone. Calgary, although generally cheaper to fly to than Edmonton, has higher taxes because Edmonton is 300 miles from the border and Calgary 130 miles. 

Taxes Cost 
Airport Improvement Fee  $10-$25
Air Travelers Security Charge  $9.30
Provincial Taxes  $1-$5
Flight Segment Tax(US) $8

11) Spain

In 2014, nearly 2 million Americans flew to enjoy beautiful and historical Spain. It is the ninth most visited by Americans and, in terms of taxes the fifth least expensive in our study, and the second least expensive in Europe.

Worst Tax: Departure Charge

The Departure Charge, like other taxes mentioned thus far, is imposed when you leave Spain. Flying out of Madrid is most expensive at around $30, slightly less expensive out of Barcelona at $25 and only $6 coming out of Sevilla airport. It is probably not coincidental however that direct flights into any of Spain's small airports are exceedingly rare, especially to the country's southeastern cities. British Airways operates American Airline routes into Sevilla and Malaga but we'll explain further below why we recommend avoiding taking a British Airways operated flight through American Airlines. 

Other Taxes 

Being the fifth cheapest country on our list, it shouldn't be surprising there is only one other airfare tax associated with Spain, a Security Tax. Throughout the country it can range between $3 and $4. 

Tax Cost
Departure Charge  $6-$30
Security Tax $3-$4

Frequent Flyer Miles and Rewards Flights 

Some air travelers have found the benefit of using frequent flyer miles to book free flights. In the United States, AAdvantage, Delta SkyMiles, and United MileagePlus are the three largest programs. Understanding how taxes varies between countries will be immensely important when booking a reward flight. While all U.S taxes with the exception of the $23 is covered by miles, international taxes are not covered by miles. Thus, flying into London you will face the full extent of its $165 taxes, on your "Free" flight. Next time booking a reward flight, be wary which country you fly into, and plan any subsequent travel accordingly, always trying to avoid connecting flights when booking with miles. 

miles

Connecting Flights

We mention above how understanding airfare taxes can be pivotal in planning a cost effective itinerary. Below you can see how stopping in certain countries can end up adding a lot more money to your travels. 

graphy

Overall, the expense of a stop over in these countries follows the most expensive list with the notable exceptions of Jamaica and Costa Rica. Stopping in Amsterdam is cheaper than stopping in France, which are both cheaper than stopping in London. A layover in Heathrow won't see you charged the full $166, but you will still see an $80 Passenger Service Fee for a short stopover as opposed to $43 in Paris or $26 in Amsterdam. A stop over in Italy, Spain, Japan, and Mexico however will see you incur the full cost of their taxes as though they were your final destination. Also noteworthy is Jamaica, the 2nd most expensive overall, but only charges a nominal $6 to pass through its airports-offering a cheaper alternative to connecting through other Caribbean countries. 

Important to know about stop overs is that connecting flights are usually made through an airline's partner's hub. For example, American Airlines through its partnership with British Airways, has a lot of connections through London. This, in our opinion, is the most expensive connection you can make, and therefore the worst for people on a budget. Delta flyers will have many connections in either Paris or Amsterdam because of the airlines' hubs there, while United Airlines flyers frequently connect in Lisbon, Brussels or Frankfurt because of their TAP Portugal and Lufthansa partnerships. Flyers to Asia also need to be wary since there are less direct flights to Asia than to Europe. We mentioned how Japan is especially guilty of taxing those who simply connect through Tokyo, imposing their full $21 tax on passing travelers. Below is a few sample itineraries from Chicago O'Hare Airport to Seoul-Incheon. 

ORD to Seoul-ICN  Taxes
Direct Flight  $87
Connect San Francisco   $102
Connect Tokyo  $113
Connect Beijing  $114

Other Strategies 

Fly to Less Busy Airports 

There are many taxes that change depending on the airport; smaller airports usually having smaller charges. Admittedly, this strategy only really works with direct flights. You are trying to avoid the busiest, most expensive airport in a country. It is harder to find direct flights to a smaller airports but they do exist. If you catch the right date, or fly out of a certain airport, or with a certain airline, you can capitalize on direct flights to smaller airports that may end up saving you some money - just be sure the inconvenience of the airport doesn't cost more than the taxes. For those hoping to travel to Northern UK, direct flights to Manchester and Edinburgh in the UK are actually quite popular, and end up saving you over $40 going to London. United Airlines flyers have great flexibility with German airports because of the Lufthansa alliance. Below you can see a the number of direct flights offered in 2014 that go to smaller, cheaper airports. 

Budget Airlines

Our last strategy is to utilize budget airlines. We mention above how you can get a direct flight to Dublin, Ireland, for almost $130 less than a flight to London the difference being in part to $145 worth of taxes-Ireland being fairer to its travelers, only asking for $23 worth of taxes.The next step is finding a budget airline such as Ryanair or EasyJet, that can get you to London for as low as $45 round-trip. As long as the price of the budget flight is less than $130, you will be saving on your round-trip to London. There are many permutations for this strategy, such as flying into France, which can be cheaper for those traveling to western Germany. Before booking, check budget airlines or even train schedules to see if those tickets are less expensive than paying the taxes. Unfortunately, this strategy only really works for European travel because of the proximity of all the countries to each other. In the Americas there is no real equivalent strategy. In Asia there isn't a huge difference between each countries taxes, which are already small to begin with, so may end up costing more to make an itinerary with budget airlines. 

Final Thoughts 

Airfare is a high travel expense, only made higher by government regulated taxes. A lack of transparency into government regulation of those taxes is at best unfair to travelers. If airfare will remain expensive, even to places it need not be, the traveler should at least be able to understand why. Until governments become more open with their taxes however, understanding which countries have the highest taxes could in the end save you money on your flight and make your travels more enjoyable. Saving $80 by not stopping over in London, or using miles to purchase a flight into Germany can mean staying an extra night in a city you really enjoy. Taxes are not going anywhere, but if you listen to the strategies listed, or maybe create some of your own strategy, you can go anywhere you'd like and worry that much less about your expenses. 

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