June 2nd, 2008
Stealth Mileage Deflation: Airlines That Charge Fuel Surcharges On Award Tickets…
In today’s hostile environment for airlines the most profitable part of their entire operation is often the selling of frequent flyer miles. Companies, such as credit card issuers, prepay for hundreds of millions of dollars worth of frequent flyer miles to offer as incentives to consumers. AMEX kept Delta afloat during their recent trip to bankruptcy court buy prebuying billions of Delta Skymiles in order to keep the airline, and by extension the Delta AMEX, alive.
Recently a scary trend has been the introduction of the fuel surcharge to award tickets. This is a completely arbitrary charge that is labeled as a tax on on a mileage ticket. Now, there are some real taxes for international award tickets, but they are minimal. The fuel surcharge (which may labeled as “YQ” under taxes) on the other hand can add anywhere from a somewhat palatable $50 to an outrageous $500 to the cost of what is advertised as a free ticket. How this is all legal is beyond me, but I’ll leave that one up to the lawyers out there to take on. In the meantime I have compiled a list of airlines that charge a fuel surcharge when redeeming for award tickets on their own metal (i.e. Using Air France miles to book travel on an Air France airplane).
To make things far more confusing, some airlines only charge a fuel surcharge on award tickets for travel on their own metal, but not for redeeming for a partner award. For example Air Canada charges a fuel surcharge when redeeming for travel on Air Canada, but not for redeeming Air Canada miles for travel on Star Alliance partner Singapore Airlines, even though if you redeem Singapore Airlines miles for travel on Singapore Airlines you will be hit for a fuel surcharge! Continental Airlines doesn’t charge a fuel surcharge when redeeming Continental miles for travel on Continental or SkyTeam partner Air France, however Air France does charge a fuel surcharge when redeeming Air France miles for travel on Air France and they even have the blatant chutzpah to charge a fuel surcharge when redeeming Air France miles for travel on Continental, even though Continental themselves has no fuel surcharge!
Due to research required that is far beyond the scope of this article, what is listed below is just whether each airline charges a fuel surcharge for travel on their own metal. The amount of the surcharge can vary wildly depending on the airline, origination country, routing, etc. Travel on partner airline can vary depending on which miles you are using and which partner you are flying on, and would take much exhaustive research to figure out. However, this much I can tell you: The rule of thumb is airlines that don’t charge a fuel surcharge for redeeming miles for travel on their own metal also don’t charge a fuel surcharge for redeeming miles for travel on partner airlines, even if the partner charges a fuel surcharge. There is no set rule however for airlines that charge a fuel surcharge for redeeming miles for travel on their own metal, they may or may not charge a fuel surcharge for travel on partner airlines, and incredibly it has absolutely nothing to do with whether the partner airline charges a fuel surcharge.
Hopefully that was somewhat clear and understandable!!!
US-based Airlines that do not charge a fuel surcharge for award redemptions when flying on their own metal:
AA (OneWorld, Starwood transfer partner @ 20,000:25,000)
Alaska (Multiple partners, Starwood transfer partner @ 20,000:25,000)
Continental (SkyTeam, Starwood transfer partner @ 20,000:20,000 with direct deposit)
Delta (SkyTeam, Starwood transfer partner @ 20,000:25,000)
Important: Delta has recently started charging a fuel surcharge for award travel on Delta metal and on select partners for flights that originate in Europe! To see how this works for yourself search for a RT award ticket from JFK-CDG-JFK which has $77 in taxes, whereas a RT award ticket from CDG-JFK-CDG has $403 in “taxes” which includes a fuel surcharge of about $325 RT)
Northwest (SkyTeam, Starwood transfer partner @ 20,000:25,000)
United (Star Alliance, Starwood transfer partner @ 20,000:20,000 with direct deposit)
USAirways (Star Alliance, Starwood transfer partner @ 20,000:25,000)
International based Airlines that do not charge a fuel surcharge for award redemptions when flying on their own metal:
Air China (Star Alliance, Starwood transfer partner @ 20,000:25,000)
Alitalia (SkyTeam, Starwood transfer partner @ 20,000:25,000)
Emirates (Multiple partners, Starwood transfer partner @ 20,000:25,000)
LAN (OneWorld, Starwood transfer partner @ 20,000:50,000)
SAS (Star Alliance, No Starwood transfer, Diners club transfer @ 2:1)
International based Airlines that charge a fuel surcharge for award redemptions when flying on their own metal:
Air Canada (Star Alliance, Starwood transfer partner @ 20,000:25,000)
Air France/Flying Blue (SkyTeam, Starwood transfer partner @ 20,000:25,000)
Air New Zealand (Star Alliance, Starwood transfer partner @ 20,020:385)
Asiana (Star Alliance, Starwood transfer partner @ 20,000:25,000)
ANA/All Nippon (Star Alliance, Starwood transfer partner @ 20,000:25,000)
British Airways (OneWorld, Starwood transfer partner @ 20,000:25,000)
Cathay Pacific (OneWorld, Starwood transfer partner @ 20,000:25,000)
El Al (Multiple partners, AMEX transfer partner @ 1,050:15, Starwood transfer via direct deposit)
JAL/Japan Airways (OneWorld, Starwood transfer partner @ 20,000:25,000)
KLM/Flying Blue (SkyTeam, Starwood transfer partner @ 20,000:25,000)
Lufthansa (Star Alliance, Starwood transfer partner @ 20,000:25,000)
Qantas (OneWorld, Starwood transfer partner @ 20,000:25,000)
Singapore (Star Alliance, Starwood transfer partner @ 20,000:20,000 with direct deposit)
Swiss (Star Alliance, No Starwood transfer, AMEX UK transfer @ 1:1)
Thai (Star Alliance, Starwood transfer partner @ 20,000:25,000)
Virgin Atlantic (Multiple partners, Starwood transfer partner @ 20,000:25,000)
So, here’s the million dollar question: Why haven’t the fee-happy US airlines added a fuel surcharge to award tickets yet? Is it because of legal fears of advertising free tickets and then charging for them? Is it the fear of killing the the goose that lays golden eggs? As you saw, Delta is now charging a fuel surcharge for award flights from Europe, perhaps they are now testing the waters…
©2008 Dansdeals.com Research.
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June 2nd, 2008 at 7:47 am
Any of you lawyers out there? Someone’s gotta take this on! Businessmen have no time for this, and probably won’t even notice!
June 2nd, 2008 at 9:17 am
I just booked a flight with delta to the Bahamas and they hit me with a $54 tax. Is that standard or a fuel tax?
June 2nd, 2008 at 10:46 am
wow Dan great article & research, thank you
June 2nd, 2008 at 10:51 am
Thank you, so much, for this and all of the extremely valuable information you bring to light/life. I noticed a few years back that on mileage tickets JFK/TLV/JFK, British Airways was asking for $300+ compared to AA at $75+ for the exact same flights. Always thought it was a British Government thing. Understandably, all of my, somewhat extensive, charging activity that was once going on my Chase BA Card, has since gone on my Citi AAdvantage card and more recently (since I started reading this page) AMEX Starwood Card.
Thanks again.
MW
June 2nd, 2008 at 11:00 am
Need to travel JFK/TLV/JFK end of Aug/beginning SEP. What does the notation “20,000/50,000″ on LAN indicate??
Thanks again.
MW
June 2nd, 2008 at 11:09 am
@Not Sure:
That’s normal international taxes and landing fees.
@Mort W.:
That means 20,000 Starpoints can transfer into 50,000 LAN.
June 2nd, 2008 at 11:16 am
so what is the best way to get to israel with starpoints now while avoiding fuel surcharges?
June 2nd, 2008 at 3:09 pm
hi i just booked a flight to israel today using citi thank you points 80000 points for aug 3 through aug 29 and they charged me 75 dollars in taxes my friend booked with elal he said about $400 in taxes
June 2nd, 2008 at 4:43 pm
well LAN doesn’t charge a fee and from what I gather its also the cheapest so.. LAN !?
June 2nd, 2008 at 6:09 pm
I was waiting for the day you published an article on this topic Dan! I recently looked into tickets from LAX/JFK – LHR and from LAX/JFK – TLV. American Airlines only want $159 in taxes and fees from LAX – LHR and like $140 from JFK – LHR. British Airways on the other hand want a whopping $444 from LAX – LHR and $380 from JFK – LHR!!(Just to give u an idea, just a little over a year ago I traveled JFK – LHR off peak for that price on a PAID ticket!) When eventually finding a seat on British Airways from LAX – TLV the total Taxes and fees were over $500! for a “free” ticket!!!
What’s sad is that I only transfered my Starwood points to BA because you only need 65,000 miles to go to TLV and I did it at the time of 30% bonus for transferring but now I am realizing that it was probably a big mistake because of the fees they charge! On the bright side, BA’s partner in the US is American Airlines and BA only charge $5 to redeem a ticket on American anywhere in the US so now I will be “forced” to “waste” my BA miles on domestic flights (it’s not usually worth it to spend your miles on domestic flights as Dan will tell you unless u manage to use your miles at a peak time when it really pays…).
June 2nd, 2008 at 11:04 pm
b’h
Dan, you said…”El Al (…Starwood transfer via direct deposit”)
what&how do you “direct-deposit” starwood-points to elal…?
please advise…as starwood has told me i cant transfer points to elal…!
June 2nd, 2008 at 11:17 pm
On this subject…
I recently was looking to get a flight from Montreal to Orlando and I had points on Air Canada and united.
Air Canada had a straight flight for 25k + $120 in taxes.
I called united and they put me on the SAME FLIGHT for 25k +$40 in taxes…
June 3rd, 2008 at 4:27 pm
as you said AIR FRANCE they have the BIGGEST “CHUTSPA”
June 4th, 2008 at 9:09 pm
i had war with singapore airlines about this.
spoke to the Pupik manager too, and they said they will get back to me about the “fuel” charge.
next thing you know they will charge you for using the bathroom for a miles ticket.
they wanted $800 sgd for a star alliance flight jfk tlv.
June 5th, 2008 at 5:01 am
@Anonymous:
Check out: http://spg.com/moremiles
September 25th, 2008 at 7:42 am
Just for ilustration. I was looking for a award return ticket on Lufthansa from Zagreb, Croatia to New York via Frankfurt. The Lufthansa said that I have to pay like 380 Euros for my “FREE” ticket. I checked on line and realised that I can buy the same ticket on the same flight for 500 Euros. So, who is crazy here?? There is no way it is legal, at least not in the form it is advertised today. I understand about airport taxes, state taxes, security taxes etc. But fuel surcharge, which in my case was rnd. 280 Euros, is a direct cost of the flight and should be a part of the fare. Airlines say that they don’t want to raise the quantity of miles needed for an award flight, but doing as they do now i blunt cheating of the travelers. Raising the quantity of miles needed, would be ok, because we are all aware what is going on with the fuel prices. Or, they can, as some do (Lufthansa for example)leave the option to a traveler to choose whether he or she wants to use aditional miles to cover taxes and surcharges or pay in cash.