Sunday Reader Email Question: Which Program To Choose For Low Award Ticket Fees?

by on July 22, 2012 · 12 comments

in British Airways, Credit Cards, Sunday Reader Questions, United

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TPG reader Margit writes in with a question about which travel rewards credit card that won’t cost you an arm and a leg for airline tickets.

“I currently have British Airways Visa card but wonder about other programs that have lower fees attached to redemption of miles for business class tickets from San Francisco to Europe?”

There’s nothing more frustrating than racking up the miles necessary for your dream award ticket, going online or calling an airline to redeem them, and finding out that you’ll have to pay hundreds and sometimes thousands of dollars in taxes and fuel surcharges on top of those hard-earned miles. It’s also good to think ahead and start diversifying your points portfolio since that will allow you more versatility when choosing destinations and booking awards – it’s just a wise investment strategy!

British Airways is one of the worst offenders in terms of taxes and surcharges on flights to Europe, often charging more in fees than the cost of the actual ticket on coach fares and nearly $1,000 on business-class fares. If you do want to use Avios to get to Europe, you can transfer them to Iberia and fly that airline to Spain instead since they generally charge much lower taxes and fees or fly Aer Lingus to Dublin (and then redeem intra-Europe from there) though availability on those partners is limited and they don’t fly non-stop from San Francisco, so you’d have to connect to a US gateway like New York, which isn’t the best option. In general, Avios are best used for American Airlines and LAN awards within North & South America since the fees are minimal.

The major US frequent flyer programs do not charge huge fuel surcharges like British Airways, but each has its own unique fees and quirks:

American doesn’t charge fees on their own flights, but they tack on similar astronomical fees on British Airways operated flights. For example a JFK-London economy class roundtrip on an AA plane costs $178 in fees vs. $608 on British Airways flights. British Airways does have a better in-flight product than AA, but definitely not worth it for coach and it’s debatable for business/first. American does have off-peak awards that can be huge values, but note they do charge $75 for awards booked within 21 days of departure.

Delta doesn’t charge fuel fees on its flights originating in the US or Asia, but it does on all awards originating elsewhere. It’s called a “foreign origination fee,” and is $250. Delta does add fuel surcharges to Air Europa, Korean and V Australia flights, though nothing like British Airways. A sample Air France San Francisco- Paris roundtrip priced out at 100,000 miles and $127 in taxes/fees for business class.  Unlike most other airlines, Delta does not charge a last-minute booking fee.
US Airways is reasonable as well (though they have lots of other add-on fees, like a fee for simply booking award travel at all!), and they have some good redemption values. For instance, an award ticket from SFO to Paris in September in business would cost 100,000 miles and $182 in taxes and fees. Not bad when you consider the cost of the ticket. US also has off-peak awards, which can be great values, like this San Francisco to Madrid roundtrip in business class for 60,000 miles and $106 in taxes and fees. If you had the US Airways Mastercard, it would be discounted to 55,000 miles and if you need to top up, US often sells miles for less than 2 cents a piece.
United miles are the most valuable in my opinion because the fees and taxes are very low on award tickets and their online search engine includes many Star Alliance partners, which minimizes the amount you have to call in to book awards (and get hit with a phone booking fee). For instance, my business-class flight on Singapore Airlines from Newark to Singapore cost me just 60,000 miles + $2.50 one-way. I found an award ticket from San Francisco to Rome in October for 100,000 miles and just $5 in taxes and fees each way. The clear winner! Just don’t book within 21 days or else you’ll be hit with a $75 last-minute booking fee.

For maximum flexibility, I’d recommend the Chase Sapphire Preferred and/or Ink Bold because the Ultimate Rewards points you earn with these cards can be transferred not only to United, but also to British Airways (potentially building up your balance of Avios even further if you want to redeem for domestic US or intra-European awards, which don’t have the huge fees), Korean Air–a SkyTeam airline that opens up redemptions on partners like Delta and Air France, and Southwest- along with other partners Hyatt, Marriott, Ritz-Carlton, Priority Club and Amtrak.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Scobro99

    Is it possible to transfer Chase points to a Korean Air account and book a Delta/Air France flight to Europe ? Trying to get to Europe next summer and from my home airport Delta/Air France work much better than United and I have lost of Chase points. Thanks

  • Tao

    Does AA charge a fee for changing dates on their Oneworld ticket within 21 days of departure?

  • Justin

    Scobro–I’d be interested in a swap if you are? I’m trying to collect UR and have plenty of DL…

  • Malibuversace

    United is by far the best program for award redemption and treating their elites like VIP’s . They have lots of options with partners that have all kinds of layover options. I am spoiled by the frequent upgrades that are free but are often held out till the last minute. Any of the domestic carriers can learn a lot about in flight service from the foreign carriers.
    $ 7 for a drink is ridiculous as it costs almost nothing to provide free ones like the old days.

  • FEV7

    Can you tell me … when is it best to transfer ultimate rewards points to United, and then get an award ticket from United, or when is it best to use the ultimate rewards website and book that same award ticket on their site?
    Thank you.

  • thepointsguy

    When you are getting less than 1.25 cents in value for your award, you may want to price out the ticket directly. So if you want to buy a $250 ticket from Chicago to Denver, it would make more sense to buy it directly via UR booking tool using 20,000 UR points vs transferring to United and paying 25,000 (and not earning miles on the ticket)

  • thepointsguy

    I agree about United miles being the most valuable, but I don’t think their elite program is the best- though it really does depend on everyone’s own experience. If you are a high spender and achieve Global Services, I think that makes a big difference- but other programs are more valuable for lower/mid tier elites for sure.

  • thepointsguy

    If the origin and destination remain the same- no. But if you need to cancel or change destinations, yes.

  • thepointsguy

    Yes- if there is saver/low level/ classic availability on AF/DL you can book via Korean- though I’d recommend calling Korean to confirm availability before tranferring any UR points.

  • FEV7

    Thanks so much for explaining that to me!

  • Serge

    As of this month United does not show Singapore availability anymore. I wonder if it’s because Singapore airlines changed its reservation system and United is working on making the inventory available again. Anyhow, I fully agree that United program is the best.

  • PJ

    wish I could give you $250 plus 10% and in return you transfer your Sapphire Points into my account. you only part with 20K minus .9K mileage awards minus .5k from Sapphire Preferred 2X rebate awaurds = ie you are selling URs at about 1.48 cents a points

    with your points I can fly non stop coast to coast one way at 1.48 X 12500= $185 cash

    Indeed when they put flights up on sale, one way ticket can come less. However how often does it happen? and the award tickets tend to have less restriction especially if I can pool the points over to a Platinum Premier member who does not pay nothing to change itinearies around .

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