("UPDATE: Delta, Alaska Air To Process IRS Refunds After FAA
Partial Shutdown," published at 6:15 p.m. EDT, incorrectly said
Alaska Air said it would offer to process the refunds in the second
paragraph and throughout. The correct version follows:)
DOW JONES NEWSWIRES
Delta Air Lines Inc. (DAL) said Monday it will process tax
refunds for customers after Congress last month failed to renew the
Federal Aviation Administration's operating authority, marking a
reversal from the carrier's comments last week.
Internal Revenue Service Commissioner Doug Shulman praised the
airline in a statement for helping their customers.
"The IRS is committed to working with Delta and other airlines
to ensure they can provide a smooth refund process for their
passengers," Shulman said.
The unexpected lapse prompted the FAA to suspend nonessential
services and stoked travelers' ire after some customers' ticket
prices included federal taxes that won't be collected. The impasse
was thought to be a boon for the airline industry, which initially
wasn't required to remit federal ticket taxes during the partial
shutdown of the FAA. J.P. Morgan analysts predicted airlines would
pocket the revenue rather than pass the savings on to consumers,
and predicted the daily benefit to the industry could be $25
million.
Last week, Delta said the expiration was leading to $4 million
to $5 million in additional daily revenue and it had no plans to
change its ticket prices.
Alaska Air Group Inc.'s (ALK) namesake separately said it wants
to help make it easier for customers to get refunds but is still
working on a process for handling them. A company spokeswoman said
the airline is still reviewing whether its systems can handle such
requests. In the meantime, the carrier said customers who traveled
during the expired-tax period can request a refund from the IRS any
time.
The latest move from Delta and Alaska Air came after the IRS
told travelers who paid for tickets on or before July 22 for later
travel could be entitled to a refund. The airline said it will
process the refunds directly to streamline the process once the IRS
provides guidelines.
The carriers stopped collecting a base 7.5% ticket-tax, $3.70
segment taxes and facilities taxes on international travel and
travel to and from Alaska and Hawaii after the federal agency's
revenue-raising authority ended July 23.
Delta's shares closed at $7.80 Monday and were inactive after
hours. Its stock has dropped 38% this year. Alaska Air's shares
were recently off a penny at $60.06 after-hours but have gained 6%
this year.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
andrew.fitzgerald@dowjones.com