Stealth Mileage Deflation: Airlines That Charge Fuel Surcharges On Award Tickets…

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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…

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39 Comments On "Stealth Mileage Deflation: Airlines That Charge Fuel Surcharges On Award Tickets…"

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Levi

Any of you lawyers out there? Someone’s gotta take this on! Businessmen have no time for this, and probably won’t even notice!

Not Sure

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?

just my opinion

wow Dan great article & research, thank you

Mort W.

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

Mort W.

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

Dan/Ctownbochur

@Not Sure:
That’s normal international taxes and landing fees.

@Mort W.:
That means 20,000 Starpoints can transfer into 50,000 LAN.

Israel

so what is the best way to get to israel with starpoints now while avoiding fuel surcharges?

yudi

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

e

well LAN doesn’t charge a fee and from what I gather its also the cheapest so.. LAN !?

Moishe

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…).

Anonymous

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…!

me

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…

zey a mench

as you said AIR FRANCE they have the BIGGEST “CHUTSPA”

yona

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.

Anonymous
Andrej Dogan

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.

al613

Fuel Surcharges: Currently BA.com does not charge fuel surcharges for travel on their OneWorld partner airlines.

Wrong. They charge Fuel Surcharge if the airline you redeem a ticket on charges this surcharge. So, yes to Fuel Surcharge on Malev, Iberia, Finnair. No Fuel Surcharges on Cathay, LAN and Alaska. They have never charged it on AA, but flight to EU were not available on AA using BA miles. Now, it seems they started to charge it on AA with allowing to book flights to EU on AA. Seems their new partner S7 does not charge it. But they don’t fly to US. So, make sense to see if we can do some combination of AA (or some other airline, that does not have fuel surcharge like LAN) and S7 to get to Israel without Fuel Surchage for 65k miles.

al613

One more thing – if you can get to EU in the winter on AA or Alaska for 40k miles, BA charges only 20k miles EU-TLV r/t. So, total is 60k and on S7 you might be able to do it with Fuel Surcharge. Alaska is partner with SPG, but not AMex.

Dan/Ctownbochur

@al613:
I don’t have any BA miles. However everyone on the DansDeals Forum has said that BA.com has never charged a fuel surcharge on any partner carriers including Malev, Iberia, and Finnair.
And Cathay Pacific does normally charge their own fuel surcharge, but apparently BA.com does not collect for them either.

Are you positive that BA.com charges for Malev, Iberia, and Finnair, as that’s the first time I’ve heard of that.

All that’s been reported on the forum is that BA phone agents are now collecting on AA and Iberia due to their new pact.

This post is just for airlines with AMEX transfer options, so redeeming AA miles is not included.

al613

just open an account and make a trial booking on ba.com, you’ll see a $500 surcharge on malev and iberia 🙂

Dan/Ctownbochur

@al613:
Just tried, it errors out before quoting the tax rate because I don’t have BA miles.

But just for kicks, what’s the exact tax+fees rate on BA.com for MAD-TLV on 11/18-11/23 on Iberia?

al613

Here is it:
Outbound – Thursday 18 November 2010
Madrid Tel Aviv (Ben Gurion) IB3752
Iberia
Economy
Inbound – Tuesday 23 November 2010
Tel Aviv (Ben Gurion) Madrid IB3753
Iberia
Economy
20000BA Miles
plus
$ 244.87

al613

All on Malev:
Outbound – Wednesday 17 November 2010
Madrid Budapest MA0581
Budapest Tel Aviv (Ben Gurion) MA0214

Inbound – Tuesday 23 November 2010
Tel Aviv (Ben Gurion) Budapest MA0215
Budapest Madrid MA0580
Economy
20000BA Miles
plus
$ 234.33

al613

No Fuel Surcharge on AA online yet!

Outbound – Wednesday 1 December 2010
General Mitchell (Milwaukee) O’Hare (Chicago) AA5003
American Airlines
Economy
O’Hare (Chicago) Newark (New York) AA3739
American Airlines
Economy
John F Kennedy (New York) Madrid AA0094
American Airlines
Economy
30000BA Miles
plus
$ 5.00

al613

Bottom line – BA charges yq on airlines that charge yq themself. Reports on FT are that on the phone they demand yq for AA TATL. (No idea how they calculate it, since AA does not have it, but they can find a way). Amex is running a promo on BA miles that you get 30% bonus. So, If you transfer 50k Amex points to BA and create itinerary with minimal BA, IB, Ay, MA, but maximum AA and S7, you can get to TLV for 50k points in y and 100k points in C.
you can also use new AA flight to BUD in April and use MA for BUD-TLV and pay like $180 yq for the whole thing, since AA does not have yQ and MA has lower yq then BA.

Dan/Ctownbochur

@al613:
Simply not true.
Nearly every OneWorld carrier besides AA charges a fuel surcharge themselves on award tickets.
So unless BA is charging for redemptions on Cathay Pacific, Finnair, JAL, Qantas, and Royal Jordanian then BA is not following your “bottom line”

It is truly weird that they charge for AA over the phone but not online though.

I wouldn’t be surprised if they just start charging for everyone soon.
Reply

al613

@Dan/Ctownbochur:
I don’t understand what is not true and what are we arguing about.
I booked a dozen tickets this year using BA miles (spent like 350k BA miles total). The only airlines they did not charge yq were Cathay, LAN, AA and Alaska. Fins or JAL yet. I just found a case when BA charges yq on AA online. I just checked BA for TATL on AA with 1 segment on BA and on BA only. For the same route Fuel Surcharge is exactly the same. (BMI also charges yq on airlines who do it themself – UA, CO, LH etc. For US and Lot, who don’t charge yq, BMI does not charge it.)nair, Malev, RJ – were all with yq. I did not try to redeem on Qanta

Dan/Ctownbochur

@al613:
You said,
“Bottom line – BA charges yq on airlines that charge yq themself.”

Which I’m saying is not true. It has nothing to do with whether the operating airline charges a fuel surcharge (YQ) or not.
BA happens to charge a fuel surcharge for travel on BA, Iberia, and Malev online as well as AA over the phone.
They don’t appear to charge it for all of their other partners.
There’s no pattern here, it’s just completely random.

You mention BMI, they also don’t care if the operating carrier charges or doesn’t charge a fuel surcharge. Continental and United don’t charge a fuel surcharge on award tickets, yet BMI collects it when you travel on them.
I read previously that BMI charged a fuel surcharge on everyone, are you saying that they don’t charge one for travel on US?
Again, that would seem to me to be completely random

Every airline is different, the key is the policies of the ticketing carrier, it has nothing to do with the operating carrier

al613

@al613:

“Fins or JAL yet.” Typo – I wanted to say I did not try Qantus or JAL yet. On Finnair, Ibiria, RJ I always see yq when I do a search. R/t to TLV – pay like $500-$600 in yq. More for tickets in business, since goverments tax yq as a price of the ticket. Look on AA website: “Q. Why are there additional governmental taxes on my award ticket when I travel on British Airways?
A. The U.S. government has determined that collection of a fuel surcharge makes award tickets subject to certain taxes. ”
http://www.aa.com/i18n/utility/jba-faqs.jsp

Dan/Ctownbochur

@al613:
This all seems to be brand new, but thanks for the info!

Let us know what BA does for booking Cathay Pacific, JAL, or Qantas online.
Apparently they’re going to charging a fuel surcharge on all partners. Terrible news for people with loads of BA miles.

al613

@Dan/Ctownbochur:

No surcharge on Cathay. For sure. Just booked ticket to HKG for $27 in taxes.

Dan/Ctownbochur

@al613:
So no surcharge for using BA miles for travel on AA or Cathay. But there is for BA, Finnair, Iberia, Malev, and Royal Jordanian.
Can’t see any pattern there…

al613

@Dan/Ctownbochur:

“You mention BMI, they also don’t care if the operating carrier charges or doesn’t charge a fuel surcharge. Continental and United don’t charge a fuel surcharge on award tickets, yet BMI collects it when you travel on them.
I read previously that BMI charged a fuel surcharge on everyone, are you saying that they don’t charge one for travel on US?”

It’s not random. But it has nothing to do with the fact if an airline charges yq on its award tickets or not. It has to do with a fact if airline charges yq on its revenue tickets! If you book UA ticket using BMI miles within US – no yq. UA to EU – yq. US does not have yq as part of a revenue ticket anywhere. So, no yq on BMI award (Just call them and price an award on US). Airline itself calculates its own yq on the route. Miles replace the fare, but not yq. If airline, like US or AA, don’t have yq at all – revenue or award – no yq using any miles. Only exception that just appeared AA TATL tickets using BA miles.

Dan/Ctownbochur

@al613:
Very interesting. I never knew that’s how BMI miles worked.

Regardless that’s definitely not the only exception. Plenty of others exist, ANA for example never charges a fuel surcharge on Continental while they do for most other airlines.

And Air Canada only charges a fuel surcharge for travel on Air Canada, not for any other partners.

Every airline has their own rules.

al613

I mean exception in terms of charging yq on an airline that does not have yq built not in their award tickets, not in their revenue tickets.

Dan/Ctownbochur

From reading up on FT is appears that BA is collecting a YQ for travel on CX, but again only over the phone, not online yet.

al613

@Dan/Ctownbochur:

It will be interesting to see the link if you can find it. I have booked 2 tickets on cx this summer using ba miles and both times did it on the phone. Both times no yq.

Dan/Ctownbochur

@al613:
These changes have been happening just over the past week.
It was on FT in the BA forum, someone getting a YQ on CX from LAX-HKG-BKK,
Call and find out for yourself!

al613

@Dan/Ctownbochur:

I’m glad now that I used most of my BA miles before the yq 🙂 Also, one more note. Up to December of 2008 you could book BA metal using AS miles without any yq. Now AS started to charge yq just on BA metal. http://www.alaskaair.com/as/mileageplan/AwardsEurope.asp “Effective December 1, 2008: British Airways will mandate a fuel surcharge fee, ranging from approximately $150 to $600 (USD), for all awards redeemed by Mileage Plan members. The fuel surcharge will be collected along with all current taxes and fees at the time of ticketing, and applies to all tickets purchased or exchanged on or after December 1, 2008, without exception.”

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