Can You Save Money Purchasing Airline Tickets in Foreign Currency?
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As TPG Contributor Mitch Berman explains, booking a ticket in a foreign currency can often save you real money if you find the right combination of carrier and currency. Here he shows you where some of the better deals can be found.
Note: Some credit cards may apply foreign transaction fees to purchases made in a foreign currency. Be sure to use a card that waives foreign transaction fees when purchasing airfare using the techniques outlined below.
Update: The text below has been updated to reflect the recent adjustment to Argentina’s official exchange rate.
Many of us have seen fares that seem too good to be true, such as São Paulo to Hong Kong in first class on American for $360 a few months ago. The catch? You had to book the flight in Brazilian reals. The other catch? It was too good to be true. American canceled the vast majority of those tickets.
But travelers can sometimes get a good deal by purchasing tickets in a foreign currency — not an incredible deal like getting that $14,000 São Paulo-Hong Kong flight for $360, but a good deal worth getting.
As we’ll see, though the majority of the better deals appear to come from a single airline, many other carriers also offer modest savings for booking in their native currency. We’ll hunt through a variety of airlines and destinations here.
First we’ll try Icelandair from London-NYC:
|London-NYC one-way on Icelandair Airlines (economy)||January 3, 2016|
|Price in dollars||$736|
|Dollar equivalent when purchasing in foreign currency (Pounds)||$716|
|Dollar equivalent when purchasing in foreign currency (Icelandic króna)||$698|
|Best savings achievable purchasing in foreign currency||$38|
A 5% savings. Not bad, but let’s admit it: not too exciting, either. But we’re just getting started.
Let’s try a couple of Asian airlines. I’ll start with Malaysia Airlines, though with the carrier’s recent woes, you may not want to fly it:
|Kuala Lumpur to Adelaide (economy)||January 7-22, 2016|
|Price in dollars||$928|
|Dollar equivalent when purchasing in foreign currency (Malaysian ringgit)||$869|
|Savings purchasing in foreign currency||$59|
I’d gladly pay my Ringgits to save $59 any day. But as a percentage of the overall flight cost, a 6% savings is still not all that impressive. Can we do better?
Let’s try Vietnam Airlines:
|Ho Chi Minh City to Paris (economy)||January 21-29, 2016|
|Dollar equivalent when purchasing in foreign currency (Euros)||$860|
|Dollar equivalent when purchasing in foreign currency (Vietnamese Dong)||$829|
|Savings purchasing in foreign currency||$31|
So far, so bad on Asia. (By the way, I couldn’t get Vietnam Airlines’ website to ring up this combination of destinations in US Dollars, so I chose Euros as the baseline for comparison.)
How about the same trip to Havana we took recently? Can you get a Cancun-Havana flight on Interjet any cheaper by choosing to visit the Mexican version of the website and paying in pesos?
|Cancun-Havana round-trip on Interjet (economy)||December 8-18, 2015|
|Price in dollars||$271|
|Dollar equivalent when purchasing in foreign currency (Mexican pesos)||$233|
|Savings purchasing in foreign currency||$38|
14% is respectable, especially if you’re doing a round-trip with several passengers. But still nothing like that legendary São Paulo deal, either. What if we try that same route today in economy in both currencies?
First I plugged the trip into American Airlines’ regular US website using my own frequent flyer number — absolutely straightforward. Then, using a different browser, I found the price in reals on the Brazilian version of the AA site:
|São Paulo-Hong Kong round-trip on American Airlines (economy)||April 29-May 9, 2016|
|Price in dollars||$964|
|Dollar equivalent when purchasing in foreign currency (Brazilian reals)||$865|
|Savings purchasing in foreign currency||$99|
So nearly a hundred bucks per person. Nice enough, but still nothing like the savings offered by the original deal. Speaking of that deal, what might change if I matched it even more closely, trying the same flights but in first class?
|São Paulo-Hong Kong round-trip on American Airlines (first class)||April 29-May 9, 2016|
|Price in dollars||$14,102|
|Dollar equivalent when purchasing in foreign currency (Brazilian reals)||$14,173|
|Savings purchasing in foreign currency||$(71)|
That’s right — going through the Brazilian version of the site and paying in reals for first class, you actually lose money. But wait. There’s both better and worse to come.
Now let’s try an actual Brazilian carrier — the largest, TAM — for a sample flight:
|Rio de Janeiro-JFK round-trip on Azul Brazilian Airlines (economy)||January 20-27, 2016|
|Price in dollars||$577|
|Dollar equivalent when purchasing in foreign currency (Brazilian reals)||$575|
|Savings purchasing in foreign currency||$2|
Bupkis, as we say in New York. Bonus highlight: The Portuguese spelling of our city is Nova Iorque!
That same itinerary on another Brazilian carrier, Azul Brazilian Airlines:
|Rio de Janeiro-JFK round-trip on Azul Brazilian Airlines (economy)||January 20-27, 2016|
|Price in dollars||$672|
|Dollar equivalent when purchasing in foreign currency (Brazilian reals)||$656|
|Savings purchasing in foreign currency||$16|
Still no special savings. Now let’s turn our attention to another floundering South American economy, Argentina.
The following Aerolineas flight routes to Los Angeles via New York. Nothing like going just a few miles out of your way!
|Buenos Aires-LAX round-trip on Aerolineas Argentina (economy)||February 4-10, 2016|
|Price in dollars||$1,960|
|Dollar equivalent when purchasing in foreign currency (Argentine pesos)||$2,495|
|Savings purchasing in foreign currency||$(535)|
Wow! You actually lose a bundle on this fare — a whopping $535, or 27% — if you pay in Argentine pesos rather than dollars. And there’s a reason for that.
Aerolineas’ rates appear to be pre-adjusted to reflect the fact that the Argentine peso is what’s known as a “soft currency,” meaning that whatever they officially say it’s worth relative to a hard currency like the dollar, it’s actually worth a bit less (although not nearly as much as it used to be).
And almost invariably with soft currencies, a black market springs up for much sought-after hard currency. In Argentina, the black market is well developed, and the soft currency is called “blue dollars.”
For example, the official rate is currently 13.88 Argentine pesos to the dollar, but the blue dollar rate is 14.50 Argentine pesos to the dollar, which is much more consistent than it once was. There’s often a great deal of fluctuation in black-market currency rates; blue dollars, for example, were trading as high as 16.08 as recently as October 23 and as low as 12.62 in mid-June.
These numbers suggest that, assuming you’re a relatively adventurous traveler, if you were purchasing this fare in Argentina with local currency, you wouldn’t want to pay with an American credit card; instead you’d want to get your hands on “blue dollars” and pay in cash. However, due to recent government changes, the “blue dollar” rate is much more comparable to the official rate, so in many cases you won’t save nearly as much as you once would by paying in cash.
A couple of cautions: Trading in any black-market currency is not without risk — less of robbery (though that can happen in unsavory trading locations) than of counterfeiting. However, in soft-currency economies, the black market for hard currencies is always booming, which means that there usually are numerous established ways to do business, and numerous relatively legit traders to work with. Choose carefully, and don’t do it at all if you’re not comfortable.
Back to the main question, though — would any carrier offer reliable and substantial savings for using foreign currency? Norwegian would. And isn’t it good?
This rapidly expanding carrier — it seems to add a new route every week or two — has captured a great deal of attention for cheap flights. In several posts on Norwegian Air flight deals, we showed how you can save on flights, as when Matt Zuzolo recently explained exactly how to set country to Norge and currency to Norwegian krone (NOK) after finding fares in dollars (with your language set to English).
So let’s do one big currency comparison first to get the full picture.
|NYC-London round-trip on Norwegian Airlines (economy)||January 25-February 2, 2016|
|Price in dollars||$495|
|Dollar equivalent when purchasing in foreign currency (Euros)||$411|
|Dollar equivalent when purchasing in foreign currency (Pounds)||$453|
|Dollar equivalent when purchasing in foreign currency (Danish krone)||$412|
|Dollar equivalent when purchasing in foreign currency (Norwegian krone (NOK))||$396|
|Best savings achievable purchasing in any foreign currency||$99|
No surprise here: The best currency turns out to be the airline’s native currency, NOK. Buying in NOK saves you exactly 20% off the dollar price. That’s consistent with the 17% savings when using NOK. So from this point on, we’ll stick with NOK, since it’s clear that it beats the other possible currencies.
But even with Norwegian, there are exceptions, as when I tried one of the carrier’s new direct flights from JFK to the Caribbean:
|NYC-Martinique round-trip on Norwegian Air (economy)||February 6-9, 2016|
|Price in dollars||$327|
|Dollar equivalent when purchasing in Norwegian krone (NOK)||$308|
|Savings purchasing in foreign currency (NOK)||$19|
Luckily, that result turned out to be an anomaly from Norwegian, and much better savings are usually possible. For example, this NYC-London one-way on the same airline gives you a much bigger Christmas present:
|NYC-London one-way on Norwegian Air (economy)||December 25, 2015|
|Price in dollars||$348|
|Dollar equivalent when purchasing in Norwegian krone (NOK)||$268|
|Savings purchasing in Norwegian krone (NOK)||$80|
That is a cool 23% off your ticket price. Similarly, though less dramatic, this one-way:
|Copenhagen-NYC one-way on Norwegian Air (economy)||January 4, 2016|
|Price in dollars||$335|
|Dollar equivalent when purchasing in Norwegian krone (NOK)||$276|
|Savings purchasing in Norwegian krone (NOK)||$59|
So if there’s one generality we can make about currency differences on Norwegian, it’s that there are no generalities, except that you will save by using NOK. I found savings ranging anywhere from 6% to 23% — usually around 20%. Try your route and date, and see what you find.
Having established that Norwegian Airlines offers the best deals I was able to find, it’s worth looking a little closer at the airline.
Norwegian, now flying to 139 destinations in 39 countries, has recently garnered positive reviews, including this one by Zach Honig. So don’t be afraid to fly the carrier — but do make yourself aware of the extra charges Norwegian and other low-cost carriers tack onto your base ticket price. Here’s the list of extra charges.
And, oh yes, while you’re buying your ticket, this can happen:
If you get happen to get stuck on the Norwegian version of the website, make sure you hit the “pay now” button — not the “pay over 6 months” button.
Ohh, I asked you not to click that button. Now you’ll get this:
Of course this is no problem if you simply produce your 11-siffer Fødselsenummer (that would be your 11-digit national ID number, by the way).
You do have an 11-siffer Fødselsenummer, don’t you? Because if you don’t, you’re going to find you’re in a great deal of Ŧŗōůbŀĕ!
But may I just say that it boggles this American’s mind that in Norway there’s apparently a national option for installment payments on a 6-month plan? Can I please apply for an 11-siffer Fødselsenummer?
Using any foreign currency to pay for airfare (or train fare) on any carrier — not just Norwegian — can pose certain problems. Here’s how to deal with a few of those.
Fraud Prevention Prevention — The first time I tried to book on Norwegian, the charge would not go through, and I received all manner of odd emails and texts. That would be the Fraud Prevention Department of good ol’ Chase watching over my interests. They stepped in because they thought Loki or some other Norse villain was making mischief with my credit card. One phone call to your issuing bank clears that up — just call before you charge and get pre-approval for the specific charges (or ballpark range).
Dynamic Currency Conversion — If ever you’re asked by a foreign vendor if you want to be charged in local currency or US dollars, always choose local currency. As Nick Ewen explains here, though it sounds simple, dynamic currency is actually a ripoff. “Just say no” to dynamic currency conversion is his longstanding advice.
Flight Cancellation — As things look now, cancellation will likely only happen — if even then — when you get yourself an absolutely ridiculous deal, like that São Paulo-Hong Kong flight we mentioned earlier.
As Eric Rosen reported here, the Department of Transportation (DOT) recently set forth an interim policy that allows “mistaken fares” to be canceled by the airlines if they reimburse the traveler for both the canceled ticket’s price and any other nonrefundable expenses made on the basis of the canceled ticket. I wrote more here about specific legal remedies available to travelers whose tickets are canceled.
The DOT’s interim policy could change at any time (they promised me an update a few weeks ago), and if and when it does, we’ll let you know all about it.
Over to You
My search for deals using foreign currency was an exhausting but by no means an exhaustive one. You may well find a great deal on an airline and in a currency that I didn’t cover in this article. Please let us and fellow TPG readers know of any good deals you’re able to find in the comments below.
Have you saved money using foreign currency to pay for a flight? If so, please tell us about your experience here.