This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.
Update: Some offers mentioned below are no longer available. View the current offers here – Starwood Preferred Guest® Credit Card from American Express, Starwood Preferred Guest® Business Credit Card from American Express
TPG Special Contributor Eric Rosen has a bit of good news for folks who want to use Qantas Frequent Flyer miles for award travel: lower fuel surcharges that can end up saving you hundreds of dollars.
When it comes to award travel, one of the biggest (and most frustrating) surprises is getting slapped with hundreds or even thousands of dollars in surcharges on top of the miles you’ve redeemed for your ticket.
Historically, Australia’s national carrier, Qantas, has been one of the worst culprits. TPG Contributor Richard Kerr discussed why you should probably avoid using Qantas miles anyway thanks to high redemption rates as well as fuel surcharges. However, now that Qantas is a Citi ThankYou Rewards transfer partner (for Citi ThankYou Premier Card and Citi Prestige cardholders), it’s the major Oneworld option for folks looking to use ThankYou points to reach Australia.
Luckily, Qantas (along with other carriers including British Airways and Singapore Airlines) has been under pressure to cut these vague and often onerous fees. It made a round of cuts back in January on international fares, but that didn’t seem to make much of a dent. As shown in the following table from Australian Business Traveller, the new surcharges were distinctly lower, but remained excessive:
As you can see, fuel surcharges used to be AU$680 (about US$507) round-trip in economy and premium economy, and AU$780 (US$580) in business and first, but dropped about AU$110 (US$82) to AU$570 (US$424) and AU$670 (US$498), respectively. That’s a clear improvement, but the cost is still pretty steep.
However, the Sydney Morning Herald recently reported that thanks to lower fuel prices, Qantas plans to once again cut fuel surcharges on award tickets, this time by 3-25%. That might not seem like much, but at least the regions getting the biggest 25% cuts are North America and South America, which should translate to further savings of about AU$140 (US$104). The savings will apply to flights booked on or after July 1, so if you booked an award prior to that date, you could call in to see if there’s any hope of getting a refund for the extra charges you already paid.
While the declining surcharges are good news, Qantas still doesn’t offer much value in its award chart. For example, a round-trip LAX-Sydney flight on Qantas metal would require the following mileage amounts:
- Economy — 96,000 miles
- Premium Economy — 144,000 miles
- Business — 192,000 miles
- First — 288,000 miles
Compare that to the following amounts using American Airlines AAdvantage miles:
- Economy — 75,000 miles
- Business — 125,000 miles
- First — 145,000 miles
Furthermore, American doesn’t levy fuel surcharges, as you can see from this sample business-class award from New York-JFK to Sydney via Los Angeles on both American and Qantas, where the taxes are just $30 and there are no carrier-imposed fees.
Clearly, AAdvantage miles are still the much better option, even if you want to fly on Qantas itself. If you’re looking to stock up on miles, the Citi / AAdvantage Executive World Elite Mastercard is currently offering a sign-up bonus of 75,000 miles when you spend $7,500 in the first 3 months. American Airlines is also a 1:1 transfer partner of Starwood Preferred Guest, and you get a 5,000-point bonus when you make transfers in increments of 20,000 points — a 25% boost. Both the Starwood Preferred Guest Credit Card from American Express and the Starwood Preferred Guest Business Credit Card from American Express are offering sign-up bonuses of 25,000 points, when you spend $3,000, for the personal, and $5,000 for the business card in the first three months.
For more on fuel surcharges, check out TPG Senior Points & Miles Contributor Jason Steele’s post on How to Avoid Fuel Surcharges on Award Travel. The Points Guy Assessment: The Chase Sapphire Preferred is a great pick for the beginner and the frequent traveler. The CSP has superb travel benefits, double points on certain purchases, and a 50,000 point sign up bonus. The $95 annual fee is waived the first year so this puts it as one of the less expensive cards, while still allowing you to earn one of the most valuable point currencies.
The Points Guy Assessment:
The Chase Sapphire Preferred is a great pick for the beginner and the frequent traveler. The CSP has superb travel benefits, double points on certain purchases, and a 50,000 point sign up bonus. The $95 annual fee is waived the first year so this puts it as one of the less expensive cards, while still allowing you to earn one of the most valuable point currencies.