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

July 22, 2012
5 min read
Sunday Reader Email Question: Which Program To Choose For Low Award Ticket Fees?
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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:

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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.
[card card-name='Ink Plus® Business Credit Card' card-id='22129636' type='javascript' bullet-id='1']

Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.