Complete Guide to Taxes and Fees on Airline Award Tickets
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Utilizing top travel rewards credit cards can be a great way to unlock (nearly) free travel. However, learning the broad definition of “nearly” in this context is one of the harshest realities of the points and miles world. Airlines tack on all kinds of taxes and fees to award tickets, which range from manageable to egregiously expensive. Some of these taxes and fees are required by government, while others are solely at the discretion of the airline.
Today we’ll take a look at these different types of ancillary costs and talk about which frequent flyer programs charge them so you won’t face a nasty surprise the next time you go to redeem your hard-earned points and miles.
Government-Imposed Taxes and Fees
The first type of added cost to your award flights is the most straight-forward. Whenever you redeem points or miles for a flight, you’ll always pay some amount of taxes and fees imposed by the country in which your trip starts, the country in which your trip ends or (potentially) both. Unless you decide to cover this cost with fixed-value travel rewards — like the fixed value redemption option from the Capital One Venture Rewards Credit Card — you must pay this to confirm your ticket.
However, the magnitude can vary significantly. If you’ve ever taken a simple domestic flight within the US, you’ll notice that you pay the exact same $5.60 in taxes for each segment of your itinerary, regardless of whether your flight is operated by Delta or Southwest. This is a security fee instituted after September 11 and raised to $5.60 in 2014, and it applies to international airlines with flights departing from the US as well. While this tax is technically imposed on the airlines, almost all of them opt to pass it on to the consumers.
Paying $5.60 pales in comparison to those fees imposed by other countries. The United Kingdom is probably the most notorious, as its Air Passenger Duty (APD) is applied on all international flights departing from the UK. These fees are based on the distance you travel as well as the class of service in which you’re booked, and they start at £13 (~$16.50) but go as high as £172 (~$218).
Most others are a bit more reasonable, but it’s worth looking at the detailed breakdown of taxes and fees for your award ticket to see what amount is going toward these mandatory charges.
The second type of additional cost you’d incur on award tickets falls under the “carrier-imposed charges” moniker. Generally speaking, these are dependent upon the airline operating the flight in conjunction with the frequent flyer program through which you’re booking the flight. In reality, you should think of them as an effective convenience fee for using your miles. These have often been referred to as “fuel surcharges” in the past, though most airlines have done away with that characterization, as they rarely (if every) correlated to the price of jet fuel.
If you’re curious to see a complete breakdown of these carrier-imposed fees associated with a given ticket — especially for an international itinerary — ITA Matrix is a powerful tool that will answer all your questions. There are generally two types of surcharges that will fall under this umbrella, and they’re classified with two-letter codes: YQ and YR. At the most basic level, these are additional fees that airlines can define themselves, and they’re actually part of paid tickets as well.
For example, here’s a one-way Virgin Atlantic business-class ticket from New York-JFK to London-Heathrow (LHR). After the base fare, you’ll see a whopping $625 listed under the “carrier-imposed surcharge” line.
Here are a few airlines (though this certainly is not an exhaustive list) that are known for their high carrier-imposed surcharges:
- British Airways
- Air France
- Virgin Atlantic
However, it’s important to note that just because an airline has a carrier-imposed surcharge doesn’t mean you will pay it when booking an award. As noted above, it depends on both the operating carrier and the program through which you book the award.
Sticking with the above Virgin Atlantic example, you will pay this fuel surcharge if you book the JFK-LHR award ticket through Virgin’s own Flying Club program:
However, you won’t if you book through Delta.
In addition, these surcharges are highly dependent on the route you’re flying and the class of service you’re booking. In our Virgin Atlantic example above, the amount you’d pay for the one-way award ticket drops from nearly $650 to less than $150 if you book in economy. And some cities — Hong Kong (HKG) is probably the most well-known example — have further limits on these surcharges.
The other thing to keep in the back of your mind is a list of which frequent flyer programs do and don’t pass on fuel surcharges to their customers. Some popular programs like Avianca LifeMiles spare you from these taxes entirely, while other programs in the same alliance — like Air Canada’s Aeroplan — impose these costs for many partner award flights.
Award Booking Fees
The final category of fees are associated with the ticket itself, as some airlines tack on additional costs depending on how you book. The two most common types are close-in booking fees and phone booking fees. Both United and American charge a close-in booking fee for awards booked less than 21 days prior to departure. Here are the full details:
- American: $75 per ticket, waived for all elite members
- United: $75 per ticket for general members, waived or discounted for all elite members
- $50 for Premier Silver elites
- $25 for Premier Gold elites
- Waived for Premier Platinum and Premier 1K elites
United also charges a phone booking fee of $25, though it’s waived for Premier Platinum elites and higher (and will likely be waived if you can’t book an award on United.com).
Alaska is another program that can tack on fees to award bookings. There’s a call center fee of $15 per ticket, though if you’re redeeming miles for Cathay Pacific or LATAM, this should be waived, as those awards aren’t available online. However, all of Alaska’s partner awards will require a $12.50 booking fee each way.
Finally, just about every frequent flyer program will impose change or cancellation fees if you need to modify or straight-up cancel an award ticket (Southwest is a notable exception, even allowing fee-free refunds when a flight drops in price). The exact magnitude of these charges varies, but you should do your best to confirm your plans at the time of booking to prevent unnecessary added costs later on.
There’s a well-known saying in economics that (sadly) holds true when it comes to award travel: There’s no such thing as a free lunch. Nevertheless, paying $100 or even $500 to get a $15,000 first-class flight for free can be a pretty huge win. Since award fees can vary heavily from program to program — just like the costs of the award itself — be sure to comparison shop between airlines to find the right combination of minimal miles and minimal surcharges.
Featured photo by Nick Ellis/The Points Guy
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