How to avoid fuel surcharges on award travel
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Editor’s note: At TPG, our top priority is providing our readers with the information needed to make educated decisions about travel and rewards-earning strategy. This is not the best time to travel, domestically or internationally, as airlines have cut major parts of their route networks. But we are sharing this information to provide value for future travel once coronavirus concerns have subsided.
This is a recurring post, regularly updated with new information.
Fuel surcharges are an important issue for award travel enthusiasts, as they can make your award flight cost hundreds (if not thousands) of dollars in addition to your miles redeemed. In some cases, fuel surcharges, often termed “carrier-imposed surcharges” by the airlines, are so high that they can match or even exceed the price of an economy-class ticket, eliminating most of the benefit of redeeming miles in the first place.
With oil prices and futures approaching record lows, it’s also important to remember that fuel surcharges these days have absolutely nothing to do with the cost of fuel. This is especially true when awards have massively different fuel surcharges for flying in opposite directions. While it requires roughly the same amount of fuel to fly from New York to London as it does to fly from London to New York, the taxes can differ by several hundred dollars depending on which airline you booked with. What might have originated as a fee to compensate airlines for the cost of carrying passengers on “free” tickets has morphed into yet another ancillary revenue stream.
Today I’ll look at which airlines do and don’t add fuel surcharges to award tickets and discuss strategies you can use to avoid them the next time you go to redeem your hard-earned points and miles.
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Frequent flyer programs that don’t impose surcharges
There are just a handful of programs that currently don’t impose fuel charges on any awards, including flights on its own metal and those operated by partners. Here are a few of the most popular program that check this box.
For all its faults, United Airlines is one of the only major international carriers that doesn’t add fuel surcharges to any award tickets. Any ticket you book with your United MileagePlus miles, including its Star Alliance and non-Alliance partners, will only include mandatory government-imposed taxes and fees, not fuel charges. United is a transfer partner of Marriott Bonvoy (with enhanced transfer rates thanks to the RewardsPlus partnership) and Chase Ultimate Rewards, giving you some easy ways to top up your account.
The only other major frequent flyer program that doesn’t add fuel surcharges to any award tickets is also a Star Alliance member: Avianca and its LifeMiles program. You’ll frequently see lucrative buy miles promotions, and the program is also a transfer partner of American Express Membership Rewards, Capital One miles, Marriott Bonvoy and Citi ThankYou Rewards, though be aware that the program’s website isn’t nearly as user-friendly as that of United. Still, Avianca tends to offer lower award rates than United on many Star Alliance premium-cabin awards, so if you’re looking to book a ticket in Lufthansa first class this may be your best bet.
Allegiant, Frontier, JetBlue, Southwest and Spirit
At least for the moment, you can use your points and miles on these airlines without carrier-imposed surcharges (though you’re still on the hook for other mandatory taxes and fees). Of course, most of these airlines don’t offer any premium redemptions, so you have minimal opportunities to maximize their respective loyalty currencies.
While Cathay Pacific’s fuel surcharges were so small as to barely be noticeable (think ~$50 on a 15-hour first-class flight where other airlines would charge $500+), effective May 1, 2020 the airline will be eliminating fuel surcharges in nearly every market. The only exception to this new policy is for flights departing Japan, which will still include 7,300 Japanese yen (~$68) in fuel surcharges no matter what cabin you’re traveling in.
Airlines that add fuel surcharges to some of their awards
Next, here’s a list of major airlines that impose fuel surcharges on some award flights and an explanation of when you can expect those extra charges to be added:
- Alaska Airlines Mileage Plan: Alaska doesn’t pass on fuel surcharges for many of its most popular partners, including Cathay Pacific, JAL, and perhaps most notably, Emirates. Alaska no longer offers the most competitive award rates for Emirates premium cabin tickets, but the ability to save $500+ in fuel surcharges still makes this redemption option attractive. The program does add fuel surcharges on award flights operated by British Airways.
- Air Canada Aeroplan: You’ll pay fuel surcharges on international award flights operated by Air Canada, but you can still book awards with no fuel surcharges so long as the flights are operated by Aegean, Air China, Air India, Air New Zealand, Avianca, Brussels Airlines, COPA, Croatia Airlines, EVA Airlines, Egypt Air, Ethiopian, GOL, Juneyao Airlines, SAS, SWISS, Shenzhen Airlines, Singapore Airlines, South African Airways, Turkish Airlines and United Airlines. Plus, fuel surcharges on LOT Polish and Thai are very low.
- ANA: This Japan-based carrier imposes fuel surcharges on award flights that it operates as well as the flights operated by most of its partners. There are no surcharges on short-haul flights operated by United or LOT Polish as well as any award flights operated by Air New Zealand, Avianca, SAS and Singapore Airlines.
- American AAdvantage: This program adds fuel surcharges to partner award flights operated by British Airways and, to a lesser extent, Iberia.
- British Airways Executive Club: This program has some of the highest and most egregious fuel surcharges of any airline, but you can avoid them by booking award flights operated by some of their partners, including Aer Lingus and Alaska. In addition, American Airlines flights within the Americas do not incur fuel surcharges.
- Delta SkyMiles: This program is probably best known for its lack of award charts, but it also imposes fuel surcharges on many awards originating in Europe and has been known to add fuel surcharges to award flights on Aeroflot, Air Europa, Air Tahiti Nui, China Airlines, China Eastern, Czech, Kenya Airways, Malaysia and Vietnam Airlines.
- Flying Blue (Air France, KLM and others): Not only does the new Flying Blue program lead to some interesting pricing; it also adds fuel surcharges to most award flights. Delta and Aeromexico operated flights have little (if any fuel surcharges), while Air France and KLM flights have small fuel surcharges for economy-class tickets and much larger ones for business class.
- Singapore KrisFlyer: This program does not impose fuel surcharges on its own flights, nor does it impose them on the following partner awards: Air New Zealand, Avianca and COPA. There are also no fuel surcharges on United Airlines or Air Canada flights within the Americas.
- Virgin Atlantic Flying Club: This U.K.-based carrier does not add fuel surcharges to the following awards: Hawaiian, Delta, ANA (domestic), Virgin Australia (domestic), South African (domestic and short haul), Cyprus Airways, and Jet Airways.
With all other major carriers, you can assume that fuel surcharges will be imposed on nearly all of their international award flights and many domestic ones as well.
Tips to avoid fuel surcharges
Given the above information, are there any ways to avoid these hefty charges the next time you book an award ticket? While there’s no fool-proof plan for doing so, there are some simple strategies you can use. Here are my favorites:
Move Avios from British Airways to Iberia
The Avios currency is shared by multiple carriers’ loyalty programs: British Airways Executive Club, Iberia Plus and Aer Lingus Aer Club. While Iberia does impose fuel surcharges, they’re far less than what you’ll find on British Airways, a carrier that is infamous for their horrendous added fees. We’ve covered how to transfer Avios between British Airways and Iberia at no cost, and TPG Senior Editor Nick Ewen has written about just how much this can save you, so be sure to read those posts for additional details.
Earn rewards with transferable points programs
There are five major reward programs that allow lucrative transfers of points airline programs: Chase Ultimate Rewards, American Express Membership Rewards, Citi ThankYou Rewards, Capital One miles and Marriott Bonvoy. The best thing about these programs is the flexibility; if you have points in one of these programs, you can transfer them to a frequent flyer program that imposes lower fuel surcharges or even none at all. In addition, each of these programs currently offers options to redeem points directly for paid tickets, which will incur no fuel surcharges and earn you miles. While these redemptions don’t always offer the best value per point, they’re good options if you’re trying to minimize the cash cost of your award travel, especially if your travel plans “force” you to take an airline that imposes fuel surcharges.
Choose a destination (or departure city) without fuel surcharges
There are many destinations where awards don’t incur fuel surcharges within North America (including Hawaii) and South America. You could even avoid these entirely by starting from the right airport, as many flights originating from Australia or New Zealand carry little to no fuel surcharges. Ultimately, you should go where you really want to go (within reason), but if you’re trying to decide between two otherwise equal options, pick the one that won’t force you to cough up extra for surcharges.
Travel on a carrier with low or no fuel surcharges
Even when a program does impose fuel surcharges, the cost can vary dramatically depending on which carrier operates the flights. For example, award flights on LOT Polish, Cathay Pacific, and TAP Air Portugal will have fuel surcharges when booked through most frequent flyer programs, but they can be as little as one third the amount added to flights on other carriers. In addition, international award flights on Air New Zealand, Aeromexico, LATAM and Saudia generally have no fuel surcharges, regardless of which carrier issues the award.
Reroute and refund
If you’re stuck with an award flight that has fuel surcharges, there’s still hope. You could try to change your flight to one that has no fuel surcharges and receive a refund if space opens up. In some cases, you can even make these changes for no fee. For example, with awards through the American AAdvantage program, you can change the travel dates, routing, carrier or even class of service for free (as long as the origin and destination remain the same). Some other carriers offer free or discounted changes to award tickets for those with elite status. When airlines change their schedules, travelers can often get a carrier to “force” additional award availability to rebook an itinerary. Finally, in the event that weather or mechanical delays cause an involuntary rerouting, travelers can receive a refund for taxes and fuel surcharges paid on flights that they never flew.
For example, back in 2014, I redeemed AAdvantage miles for me and my daughter to fly to Europe on Iberia. However, when we were rerouted on flights operated by American (and not subject to fuel surcharges), I was able to receive a total refund of $268.20 from American Airlines.
Use a credit card that reimburses you for travel expenses or airline incidentals
Some credit cards, including the Capital One® Venture® Rewards Credit Card, allow you to redeem miles for just about any travel expense. If you’re stuck paying fuel surcharges on an award ticket, you can use the miles earned from these cards to cover the cost without a cash outlay. Other cards, like the Citi Prestige® Card and Chase Sapphire Reserve, offer an annual credit for airfare or other travel purchases, and since you’re booking through an individual airline, it will likely count towards these thresholds.
There are also several cards, including the Bank of America®️ Premium Rewards®️ credit card and The Platinum Card® from American Express, that will reimburse you for certain airline incidentals liked checked bag fees or lounge visits, and you may find that award travel fees (including fuel surcharges) will count towards these amounts. However, the amounts and terms of these statement credits vary, so check with your card issuer to see if fuel surcharges are eligible for reimbursement.
The information for the Citi Prestige and Bank of America Premium Rewards has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Use reward points to pay for the airfare directly
A final option would be to redeem points directly for the flights in question, as this would remove both the fuel surcharges as well as the cash outlay. For example, the Chase Sapphire Reserve offers you 1.5 cents per point when booking travel through the Chase Ultimate Rewards Travel Portal, while the Chase Sapphire Preferred Card offers a rate of 1.25 cents per point. On a trip to Europe, I was able to purchase several discounted, short-haul flights with a minimal outlay of points and no dollars. In contrast, an award booked through a program would have set me back even more miles, and I also would’ve incurred quite a bit of taxes, fees and fuel surcharges. And as a bonus, you’ll even earn miles from the trip!
Do the math. Would you rather spend more miles or pay high fuel surcharges?
While it can be incredibly frustrating to get to the checkout page and realize you need to cough up a few hundred dollars to book your “free” flight, you should make sure to focus on the all-in total cost and not just the sticker shock of the fuel surcharges. What exactly do I mean by this? Let’s use a Lufthansa first-class award between the U.S. and Europe as an example.
My preferred booking method for this ticket would be to pay 87,000 Avianca LifeMiles, worth $1,479 based on TPG’s latest valuations, and $5.60 in taxes for a total cost of about $1,485. Alternatively, you could spend 70,000 Aeroplan miles (worth $1,050 based on TPG’s valuations) and about $700 in fuel surcharges, for a grand total cost of just over $1,700. In some cases the numbers might work out differently, and spending a bit more cash to save tens of thousands of points might be the better option.
As the saying goes, “There’s no such thing as a free lunch,” and fuel surcharges tacked onto award tickets are proof of this exact economic theory. Fortunately, there are some simple strategies you can use to avoid these extra fees or at least minimize their impact on your wallet. Hopefully this post will help you plan your next award trip without breaking the bank!
Ethan Steinberg contributed to this post.
Featured photo by Marcio Rodrigo Machado/S3studio/Getty Images.
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