This relates to the "taxes" that appear on each ticket you buy for air travel. You will often see fares advertised as "excluding tax and charges" or something similar. The latter part, "charges" was added relatively recently as many of the little bits that are added on are not taxes at all. The original idea came about as a country would charge a tax for arrival and departure - hardly unreasonable - the amount was never great and usually charged in US Dollars (or even the local currency). To avoid constant fare changes, it was agreed within IATA that for practical purposes, these taxes would be seperated out and charged as an addition to the fare. The "tax and charge" element on some tickets, now, can easily come up to £200 and in many cases, comes to a lot more than the fare charged.
With the fare war, airlines realised that more and more items could come out, allowing lower "headline" fares. As these amount were indicated by two letter codes, the travelling public are never really aware of what they are paying for.
COUNTRY NAME- FRANCE
So, what are these "taxes and charges" ?
Let us take a look at a range of tax and charges applied by a particular country. Here is a list of the taxes applied in France:
Even here, further codes are used to identify codes. The FR tax is clear enough. It is a genuine tax. PSC stands for Passenger Service Charge. This is what you pay for using the airport. Interestingly, you are also paying VAT - How many firms claim this back - the UI element? IZ "solidarity" tax is the most interesting. This has been recently applied by the EEC and others and is your contribution to fighting green issues, global warming, health in Africa and generally saving the whale and other activities. If you agree or not is non-negotiable.
COUNTRY NAME- THE WORLD
It does not stop here. Below are listed some of the global taxes that are applied, irrespective of the country:
These (upper right box) are certainly some of the more unusual charges that are applied. They are ones which you would normally assume are included in the fare. YQ tax - the fuel and YR - insurance. Normally, in a fare (as you find on rail and coach) you would expect that the petrol and insurance element would be included in the fare. The AP element is for the increased security cost since the 9th September attacks in the US - one would reasonably have thought that these could, by now, be incorporated.
COUNTRY NAME- UNITED STATES
America (right) goes to town on taxes. Even the flaura and fauna gets a look in with the APHIS "user fee". Individual cities get a slice of the cake as well, which appears as the XF tax (usually followed by the city code and local currecy amount, for example XF2.5LAX4.25 which means that Los Angeles receives £4.50.
COUNTRY NAME- UNITED KINGDOM
On the left, we see what the UK charges. The only proper tax is the GB Air Passenger Duty. The UB tax is not described well, but essentially is your paying for the use of the airport. This depends on which airport you use. Heathrow being the most expensive with regional airports being a lot less. That said, fares from regional airports are usually a lot higher than the main airports of London, so this "benefit" is more than outweighed by the higher fares charged to regional airports.
What has to be noted, however, is that the tax you pay is an addition of country A (which you leave) and country B (which you are going to) - and this is then repeated for when you return. Below is a booking for a trip, in Economy to New York. Taxes are first indicated by the generic letters, "XT" which means "total of all taxes and charges". As you will see £40 goes to the UK Government, £13.00 for using Heathrow, £15.40 to the US Federal Government, £2.60 for US Customs, £3.60 for the US to check you out, £2.60 "APHIS" (flora and fauna) £1.30 for more US security, £65.00 for the fuel and the XF tax, which you will see in this case amounts to £4.50 for the City of New York. A tidy sum.
How do these apply on my ticket ?
5MAR DEPARTURE DATE-----LAST DAY TO PURCHASE 18FEB
By contrast, here is a ticket for a journey to Dubai:
Apart from the two UK based tax and charges, you can see the the UAE (United Arab Emirates) only makes one charge and is clearly marked AE (Arab Emirates) - Further, the amount is quite modest compared to the demands of the UK. Perhaps this is a good indicator of the state of an economy !
Finally, just for fun (and another great contrast) below is listed a flight from London to Paris. I have listed applicable taxes above - work out what you are paying for and to whom:
In the example on the right, notice the relationship between the fare and the taxes paid...
Above - USA ticket - Fare and Taxes
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TXN** (code/ country) (Sabre Tax Entry)