American is Charging You Too Much Money for British Airways Awards. Here’s How to Reduce the Fuel Surcharges.

Reader Mark F. emails to let me know I haven’t covered a quirk or glitch that causes American AAdvantage to charge too much in fuel surcharges.

Becoming aware of this glitch will save you hundreds of dollars the next time you redeem American AAdvantage miles for flights on their partner British Airways.

Like almost all British Airways partners, American collects fuel surcharges for award tickets when traveling on British Airways (and to a much lesser extent, Iberia, but not transatlantic joint venture partner Finnair).

There was a false rumor last year that American was going to start collecting these junk fees on all partners. Thank goodness that turned out to be false. Because these junk fees total hundreds of dollars of cash outlay when redeeming a supposedly ‘free’ award ticket.

Oneworld partner LAN does not collect fuel surcharges on BA. And for a time US Airways Dividend Miles wasn’t collecting fuel surcharges on BA when they first joined oneworld but has since started to do so.

But American asks you to pay more BA fuel surcharges than necessary. And you can do something about it.

I pulled up a round trip first class New York – London award. Taxes came to a whopping $1194.70. That’s $366.70 in actual taxes (London departure taxes, especially when flying a premium cabin, are killer) and $828 in fuel surcharges.


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It turns out that $828 is actually the correct fuel surcharge on this paid roundtrip ticket.

But it also is the case that the fuel surcharge would be lower if you priced out two one-way tickets.

Here’s the New York – London segment. Fuel surcharge is $414, or half the price American is charging for a roundtrip.

But here’s the London – New York return. The fuel surcharge is ‘just’ $268.60, or $145.40 less.

All American AAdvantage partner awards are priced as one-ways. You can just book two one-way awards, and save significant taxes.

Here’s the one-way New York – London outbound, pricing out with $414 fuel surcharges.


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And here’s the one-way return, pricing out with $268.60 in fuel surcharges.


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Booking one-way awards instead of roundtrip saves you on fuel surcharges.

I’ve also had luck in the past getting the rates desk to price taxes as one-ways, thus reducing the fuel surcharges I’m required to pay and still booking a roundtrip.

The reason I do this, although I’ve had mixed success and it takes longer, is because if the person whose miles are being used doesn’t have top tier elite status they have to pay a fee to change or cancel their tickets. And if they have two one-way tickets, and need to change or cancel both the outbound and return, they’re hit with twice as big a fee as if they had just booked roundtrip.

So the choice is yours, but savings of $145 per roundtrip ticket are big enough that I’d take steps to avoid the higher fuel surcharge either by booking one-ways in markets where this applies or getting the rate desk involved and arguing over the correct fuel surcharge to apply.

Hopefully for those who do use American miles on British Airways, this tip can save you $145 per ticket, which is nearly $600 for a family of four!

Of course, this is all much better than redeeming British Airways points since they add fuel surcharges onto all partners who add them onto paid tickets.

Here’s how to minimize fuel surcharges when redeeming British Airways points. (There’s actually currently a lawsuit pending over BA’s fuel surcharge practices, and if I understand correctly one or two blog readers are even named plaintiffs.) Sadly there is no way to fuel dump an award ticket!


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 InsideFlyer.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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Comments

  1. So the shorter duration trip with the jet stream has more fuel surcharges than the longer duration trip against the jet stream. Just another example of how rigged and absurd the entire fuel surcharge concept is.

  2. Interesting-thanks for sharing. The whole fuel surcharge on award ticket model is such a scam.

  3. Given Congress and the DOT, AA can charge whatever nco-pay it damn pleases without telling you in advance, other than publishing an incredibly vague “fees up to $1,000” (or whatever the maximum amount is) notice.

    So there may be absolutely nothing wrong with it: it could be the way AA charges co-pays on these awards.

    AA legally doesn’t have to tell us in advance about the exact co-pays. Kind of sad that this is the law of the land, isn’t it?

  4. Fuel charges are not a scam but rather just another example of how airlines manage to get the best regulators that money can buy.

  5. This us because BA charges ex US in dollars and ex GB in pounds at rates that aren’t equivalent. (so when AA converts it to dollars, it’s lower than the outbound.

    I think if you did the entire award ex GB RT, the YQ would be 2x the lower amount).

    I tried to raise a ruckus about this a few years ago but didn’t get antwhere.anywhere.

  6. Great post but I — like most of your readers — probably have an even better way to avoid these crazy fuel surcharges on BA awards. We simply don’t redeem our Avios points to fly BA!

  7. Oh, I meant to say we don’t redeem our AA miles to fly BA.

    Of course, it’s worth remembering that intra-Europe, you generally don’t have to pay the fees, at least if you use Avios points. I doubt many folks redeem AA miles for intra-Europe travel, though.

  8. Why do they charge more from the UK than to the UK? Probably because it looks really bad on top of the already high UK departure tax. These taxes cause me to value AA miles accordingly at around half of what I value UA miles.

  9. 1. LHR-Asia 2 using 52.5k AA miles, which incurs $540 in taxes and fees.

    2. LHR-Europe using Avios (10k + $40 taxes/fees), and Europe-Asia
    2 using 52.5k AA miles plus $99 in taxes and fees.

    Which one would you choose?

  10. Thanks Gary. Now if I could just figure out a way to avoid BA on TATL award flights. Why is it BA always seems to have availability into LHR and AA does not? Argh….

  11. @Gary – Can you book 2 one-ways, then call to merge into one roundtrip. Then if you need to cancel, it will be one cancelation fee?

  12. @Jim L American really yanked transatlantic premium cabin availability about two years ago. BA isn’t as generous as they once were, but out of secondary cities especially (like PHL, BOS, IAD) plus JFK they can be pretty good.. Frankly I would rather fly JFK-LHR on a AA 777-300ER in business than flying BA’s business on the same route!

  13. AA is overcharging or not?

    In addition to the headline, you then say “It turns out that $828 is actually the correct fuel surcharge on this paid roundtrip ticket.”

    But when booked as 2 one-ways, the return YQ is cheaper.

    So AA is not overcharging, but you discovered a discrepancy or error in the way BA calculates their YQ, which can be exploited for our benefit?

    It sounds like BA is overcharging. Not AA. Are the results the same when booked via Avios/BA?

    -David

  14. @David my point is that (1) AA is charging more than you need to pay, (2) AA prices out awards as one-way, so one-way fuel surcharges should apply, (3) but you have to force that, and doing so yields savings.

  15. I just tried a simple experiment on BA’s site.

    It’s also a lot cheaper there booking one-way awards rather than r/t awards in the cash component of the award. I did not look at the breakdown of the charges, but it appears to be driven by BA in my simple experiment of 1.

  16. @David – yes, it is driven by how BA’s fares show fuel surcharges, but since American prices awards as one-way they are effectively overcharging you by pricing fuel surcharges as roundtrip. Rate desk has acknowledged this to me when I’ve successfully had them adjust over the phone.

  17. I think it needs more experimentation to see where the differences are.

    I was using your example and pricing JFK-LHR (r/t and one ways in both directions) with limited availability except in coach for close in dates, I just used coach for the experiment.

    -David

  18. Interesing (I’m one comment behind here)

    If they really are overcharging, then do they owe people refunds?

    Somebody will latch on to that at some point.

    Thanks for the info.

    -David

  19. Just curious-What do you think about the app Shopkick?It gives you points and credits just for entering stores and extra points for using your linked Visa.

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