Airlines that Tax You When You Redeem Your Miles (and Those that Do Not)

TM Travel World runs down the fuel surcharges added to award tickets by various carriers. Bottom-line is that most North American programs do not add fuel surcharges to awards, most programs in the rest of the world do.

However, there are exceptions.

Air Canada Aeroplan adds thesef fees to flights on Air Canada only.

American adds them to flights on British Airways only. On the one hand it can seem worthwhile to pay them with American — British Airways availability in premium cabins tends to be excellent, and they offer a very good business class seat. But flying multiple long haul BA flights can really get costly. US to London, stopover, London to South Africa, and then back to the US via London can be more than $1000 cash per person in addition to miles as a result of fuel surcharges, high airport taxes, and the U.K. premium cabin departure (luxury) tax. Ouch.

Delta quietly adds these fees to rewards on some partner airlines and not others, and the list apparently changes. Troy does a good job keeping track of these. I had no idea they had begun adding fuel surcharges to Air Tahiti Nui redemptions. (American, which also partners with Air Tahiti Nui, does not impose these charges.)

Delta also has an ‘international origination’ fee, they add an extra charge for flights that begin outside of North America. Go figure! What’s more, they still to the best of my knowledge (please correct me!) do not publish an award chart that doesn’t begin or end in North America. How many miles is it to fly between South Korea and Thailand? Shh… It’s a secret.!

How big a deal are fuel surcharges? One Flyertalk thread this morning notes that redeeming an award using Lufthansa Miles & More miles can be more expensive than just buying a ticket.

This member found out that buying a coach ticket between Prague and Moscow cost 30% less cash than redeeming miles for an award, and of course you don’t spend any miles (and earn miles, and help qualify towards status).

Fuel surcharges pretty well make redeeming for economy class awards utterly illogical. Of course, I recommend premium cabin redemptions anyway, and it certainly makes those more expensive, but the outcomes with coach can be just absurd.

That’s why SAS Eurobonus is really to be commended. While most European, and indeed most non-North American programs add fuel surcharges to their award tickets, at the very end of 2009 SAS Eurobonus ended the practice. A real win for their members, really engendering loyalty, and a move that earned a Loyalty Leadership Award at the first annual Frequent Traveler Awards in Houston in November.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Gary-thanks again for your insight. With respect to SAS, could you maybe a review of the program ?

    Thanks

  2. The Miles & More situation is partially due to the high European airport taxes/security charges plus the fuel surcharge. I bought a roundtrip ticket from Berlin to Munich for a business trip in October. The actual airfare was only 42 euro but the taxes/charges were 93 euro for a total ticket price of 135 euro! I will give props to LH, however, because you do have the option of paying for these charges with miles on an award ticket, so you truly have a “free” ticket. Granted, it will cost you more miles than normal, but if you’re swimming in LH miles then it could be a viable option.

    As for Delta – don’t get me started. Unless it has changed recently, they don’t waive that int’l origination fee for Diamond Medallion. Last year I was already over in Europe on a business trip and wanted to book an award flight from Germany to France. I ended up using LH miles instead because it was cheaper.

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  4. @Brian A. Lufthansa Miles & More also charges an award ticket fee ($100) for members based in some countries. Makes it even less value to redeem for economy.

  5. Even booking a regular award ticket with Delta can be a “taxing” experience when trying to use delta.com and their availability calendar. I’m still not seeing all the improvements that they said they were making.

  6. The main problem with Lufthansa M&M is the fuel surcharge – YQ. This causes a lot of confusion, because it varies for marketing reasons – it’s lowered for the promotional (or simply low) fares to match the advertised price points (like 99 EUR round trip – but with regular YQ and associated taxes this couldn’t be done with negative fare!). On award redemptions though, M&M charges their full amount of YQ – which is more then 100 USD per long haul segment and more then 35 USD per short haul. Doing a simple 4 segment round trip (connecting in Germany or any other M&M hub) quickly adds those up to a point that it’s cheaper to buy a regular ticket. Difference is only in flex (regular M&M can be changed/refunded against 50 EUR). On European routings you can pay the taxes with 15k miles (used to be 10, then 12k) and get a non-flexible last minute “flysmart” award for 15k (or 30k all in, 40k in business class), which can be a good deal close to departure when all the cheap fares are gone.
    Another thing is, last year Lufthansa decided to stop refunding YQ on canceling lower priced tickets, which used to be a good way of at least getting some money of your non-refundable fares.

  7. Forgot one thing :).
    If you want to book a flight with M&M and avoid the YQ, look for LOT, as they don’t charge it on award flights anymore too. It’s gamble to get a good seat on long haul in a premium cabin, but short haul their product is on par.

  8. I just had my first (pun intended) experience with this booking BA flights to India. Having been prepared in advance by forums here and elsewhere, I went into booking the F awards on BA to India understanding that I was going to be paying about the cost of a Y ticket in Taxes, fees and fuel surcharges. Indeed, about 800$ per ticket (not broken down for me) was the result, but since the miles were basically free for doing next to nothing, I figured it was a good spend of the miles and the 800$ was a manageable amount. I did NOT know that the taxes in the UK were based on CLASS OF SERVICE which makes SENSE but sounds a bit snarky!

    Also, the fuel surcharges for F are higher than for C and for Y. Again, I can understand SOME of this justification, bigger seats, need to spread the fuel requirement out across fewer passengers. Heck, even maybe BIGGER passengers. But still, it starts to sound silly when they will fly me to a destination in Y for less than the taxes and fees on an F award.

    Would do it again, but still won’t like it too much.

  9. tivoboy – Firstly (see, I did it too), well done on using your BA miles wisely. The UK Air Passenger Duty and BA fuel surcharges are both huge but $800 for a First Class return to India is excellent value in my book.

    Just a note on the UK APD and BA YQ. There is an APD rate for economy class passengers and a higher rates for everyone else (ie premium economy all the way up to First). In fact the higher rates is called the ‘standard rate’ and the lower, the ‘reduced rate’.

    As for BA YQ (fuel surcharge), there are three bandings, economy, premium economy and both First and Club World.

    I hope you have some time to enjoy the Concorde Room at Heathrow.

  10. @Baggageinhall. Oh man, are you kidding!

    I’m planning to hit the corcorde room for bfast upon arrival and bfast the next morning and a sit down lunch during out 5 hour layover on the return. I plan to have a massage at the spa, (even though it is apparently only 25 minutes) I’m reserving a cababna for the return, and changing OUT of one pair of pajamas and into a SECOND pair for the next flight. 🙂 (honestly, they most like do NOT have pajamas that will fit my 6’6″ 240 frame, I’ll look like a blue Oompaloompa.

    Anyone have any must do’s for BA First working it?

    (sorry to thread jack 🙂 )

  11. United is particularly generous in this area – and does not add ANY fuel surcharges or fees to redemptions on United or any of its many partners.

  12. @Lack – thanks for the info. I didn’t realize that the fuel surcharge was variable for different tickets sold on the same flight. It seems sort of sneaky. I’m surprised that the EU isn’t all over that one.

    As you say, the ‘FlySmart’ awards can be a good deal. In fact, the very first time I flew to Berlin from Munich was a personal last minute trip due to the fact that my business trip had been extended another week. The award ticket was 30K miles which I thought was a decent deal (15K FlySmart +15K fees/taxes/etc.). I sure wish Delta had a similar program.

  13. does the AA fuel surcharge still apply if you go to europe via iberian air (i.e. connect though carribean then to spain etc.)

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