fbpx

The 2020 Guide to Avoiding Fuel Surcharges

With uncertainty lingering over the future of Aeroplan, 2020 is the year of diversifying our points earnings and redemptions through a wider range of award programs. Along that process, however, one variable that’s always remained a bit of a black hole is fuel surcharges: which programs are guilty of them, which airlines levy them, which countries regulate them, and how do we predict the cost? 

Fuel surcharges are made all the more confusing by how arbitrary they are – there’s really no logical explanation for which programs levy them, and if so, how much. And yet, if you aren’t paying attention, you could easily map out a business class redemption but find yourself paying $1,000+ in surcharges at the end of it. 

In this guide, we’ll walk through the treatment of fuel surcharges among the major Canadian award programs to help you understand how to avoid the expensive traps that the airlines have set for you and extract the best value out of your miles. 

In This Post

What Are Fuel Surcharges?

On award tickets, we generally pay two types of fees: government-imposed taxes and fuel surcharges (also known as carrier-imposed surcharges). The taxes usually add up about $100–$150 at most, and there’s no way to avoid this fee (other than flying to/from a different country). 

Fuel surcharges, on the other hand, can cost any amount depending on the airline and loyalty program in question, and to be completely frank, they’re really nothing short of a shameless cash-grab. 

While they were ostensibly first introduced by airlines as a protective measure during times of high oil prices, these days they’ve transformed into an easy way for airlines to collect pocket change when their members redeem miles for “free” flights. After all, the majority of customers aren’t savvy enough to learn how to avoid them and will likely pay up when it’s the first option that pops up on the search engine.

But of course, we know better than that, so let’s begin with a few general pointers on avoiding fuel surcharges before delving into the specific details of the major award programs. 

General Rules on Avoiding Fuel Surcharges

One of the easiest ways to take fuel surcharges off the table entirely is to pay attention to which country you’re originating from (or in some cases, travelling to). 

Countries like Japan and New Zealand have imposed strong regulations on fuel surcharges, so when flying out of these countries, it won’t matter which frequent flyer program you’re using or which airlines you choose. The governments and aviation authorities of these countries regulate the fuel surcharge, either limiting the amount or banning it altogether, and airlines must follow these rules.

For example, most of us know that Lufthansa levies fuel surcharges in the range of $500–1,000 for trips from North America to Europe.

Start in Japan, however, and that surcharge drops significantly.

  
image4.png

It might even be fun to choose airlines that would normally levy high fuel surcharges when departing one of these countries, in order to experience an onboard product that you’d likely never pay for otherwise.

A second general-purpose tip is to avoid departing from London. While this doesn’t technically count as a fuel surcharge, the UK charges $300+ of Air Passenger Duty (APD) per adult on a business class or First Class award ticket, and this fee can easily be avoided by flying in and out of a different European city and using Avios to hop over to London (if you don’t mind the slight inconvenience of a few more hours of travel time). 

Finally, keep in mind that British Airways is an airline that’s notorious for hitting you with high fuel surcharges no matter which type of miles you’re using to redeem points, including its own Avios program, Alaska Mileage Plan, and Cathay Pacific Asia Miles – you’ll almost never be able to avoid the surcharge on BA flights, unless you make use of one of the countries with fuel surcharge regulations as discussed above. 

Aeroplan

Avoiding fuel surcharges with Aeroplan is a pretty elementary topic when first learning about the program, and it’s covered extensively in our Essential Guide to Aeroplan. Here’s a complete list of which airlines to pick and which to avoid.

The following airlines generally levy high fuel surcharges on international trips ($500+):

  • Air Canada

  • Austrian Airlines

  • Lufthansa

The following airlines levy moderate amount of surcharges (in the $100–200 range), which could be worth paying if it’s the most convenient option:

  • Air China

  • ANA

  • LOT Polish Airways

  • Thai Airways

The following airlines do not levy any fuel surcharges:

  • Aegean Airlines

  • Air India

  • Asiana Airlines

  • Avianca

  • Brussels Airlines

  • Copa Airlines

  • Croatia Airlines

  • EgyptAir

  • Ethiopian Airlines

  • EVA Air

  • SAS

  • Shenzhen Airlines

  • Singapore Airlines

  • South African Airways

  • Swiss

  • TAP Air Portugal

  • Turkish Airlines

  • United

As seen below, a one-way ticket to Europe on Austrian Airlines will cost $684, but the same routing on Turkish Airlines would only cost $68. 

As you can tell from the list, the situation isn’t too bad at all, considering that a vast majority of airlines levy either zero or a moderate amount of fuel surcharges.

The real problem with Aeroplan is that the search engine tends to favour flights on Air Canada and Lufthansa, which come with the highest surcharges, and the key here is to plan your own routing using the no- and low-surcharge airlines and call Aeroplan to make the booking. 

 

If you’re planning a multi-stop Aeroplan Mini-RTW journey around the world, then your total taxes and fees will likely end up in the range of $200–300 (keeping in mind that you still must pay the government-imposed taxes, airport fees, etc.) And if you were to include a few of the moderate-surcharge airlines, then the total taxes and fees would probably end up in the range of about $400–500 per ticket. 

Of course, the various government-imposed regulations on fuel surcharges still apply, so you can work this to your advantage if you’re headed to one of those countries.

If you’re flying a one-way redemption to Mainland China, then adding a throwaway flight to Hong Kong may end up reducing your surcharges. If you’re booking a round-trip to Australia, consider booking that as two separate one-ways so that your return trip benefits from Australia’s fuel surcharge regulations. 

  

Keep in mind, though, that the regulations may apply differently depending on the country. For example, having a stopover in Australia doesn’t seem to limit surcharges, whereas a stopover in Taipei does.

Meanwhile, departing out of Australia seems to only kill the surcharges on the first flight of the itinerary, whereas departing out of New Zealand kills the surcharges on the entire ticket (so you could fly Austrian Airlines later on the same ticket and pay zero fees there). I encourage you to play around further with the search engine to tease out the exact patterns for your destination of choice. 

Note that if you’re dead-set on the convenience of flying on a direct long-haul Air Canada flight, then alternative Star Alliance programs like United MileagePlus and ANA Mileage Club would have zero fuel surcharges on Air Canada, but you’d just have to go through the trouble of collecting those mileage currencies instead of Aeroplan miles. 

Alaska Mileage Plan

Alaska Mileage Plan is pretty favourable in the sense that most airlines do not levy fuel surcharges when using Alaska miles. 

Alaska does impose minor fuel surcharges on Hainan Airlines (about US$135 on a one-way journey) and Icelandair (about US$115 on a one-way journey), as well as much more significant fuel surcharges on British Airways, but keep in mind that none of those airlines represent the best sweet spots for using Alaska miles. 

  

Rather, most travellers prefer to redeem Alaska miles on Cathay Pacific, Japan Airlines, and Emirates, which all come with zero fuel surcharges.

Therefore, for the most part I think of Alaska as a surcharge-free program, given that we always want to redeem our miles for the best possible value, and that definitely isn’t with British Airways. Meanwhile, I still find the minor fuel surcharges on Hainan and Icelandair quite palatable, given that the redemption rates are so favourable to start with. 

British Airways Avios

As a general rule of thumb, British Airways Avios levies fuel surcharges on most of their partners, but these surcharges are in the acceptable range for the most part. For example, Japan Airlines, Cathay Pacific, and Iberia all levy fuel surcharges in the $100 range.

The major airlines with high fuel surcharges using Avios are British Airways themselves, as well as Qatar Airways. A Qatar Airways flight involving countries that don’t regulate fuel surcharges comes to about $400.

image14.png

Taking advantage of Japan’s strict regulations, however, brings the total taxes and fees down to a mere $180.

One of the most common use of Avios are for short-haul flights within Europe and Asia. These flights usually come with negligible amounts of fuel surcharges, which makes short-haul hops around the world such a compelling sweet spot.

However, it’s still worth checking out the cash price of a ticket, since even $30 of taxes and fees might make for a poor redemption value compared to a $35 ticket on EasyJet or AirAsia.

Something else to consider is the Avios Oneworld multi-carrier chart. I recently went through the process of booking one, and even originating in Japan didn’t waive the British Airways fuel surcharge – I had to change my flights British Airways flights to Iberia to bring my total taxes and fees down to the $400 range.

Meanwhile, my assistant Rachel recently priced out an itinerary involving Japan Airlines First Class to Tokyo, followed by two segments of Qatar Airways business class and First Class, and the total taxes and fees came to $663. 

Did stopping in Tokyo lower the fuel surcharges levied by Qatar Airways? Who knows at this point – the taxes and fees involved when using the multi-carrier chart seem even more arbitrary than usual, and it’s hard to tell whether the jurisdictional surcharge regulations are applied based on the initial point of departure or on a segment-by-segment basis. 

Overall, taxes and fees on a Oneworld multi-carrier award are generally quite high (you can expect to pay at least $500 in exchange for the incredible value to be unlocked in this award chart), but they do seem to stay under $800 as long as you avoid British Airways flights. 

I encourage anyone who’s looking to book a Oneworld multi-carrier award to call British Airways and price out the taxes and fees beforehand – Rachel reports that she was able to do this on the phone without actually making a booking.

Cathay Pacific Asia Miles

Cathay Pacific Asia Miles is known for its generous distance-based award chart and the capacity for fun one-way flights, and the fuel surchage situation virtually mirrors that of its fellow Oneworld loyalty program British Airways Avios. Flights on British Airways and Qatar Airways tend to incur very high fees, whereas other airlines levy a much more moderate amount.

For a Qatar Airways flight departing from Montreal, you can expect to pay about $800–900 in surcharges per person, which is probably still pretty good value for the excellent Qatar Airways Qsuites product, but definitely isn’t ideal.

Instead, consider originating in a jurisdiction with fuel surcharge regulations like Japan or Hong Kong, which brings the amount down to a much more palatable $100 range.

For the many outstanding Asia Miles sweet spots involving Cathay Pacific, Japan Airlines, and Qantas, the surcharges typically come in at a not-insignificant but reasonable range of $300 for a one-way trip involving two segments.

Screen Shot 2020-02-19 at 4.20.00 PM.png

Another potentially valuable Asia Miles redemption is the Royal Jordanian service between Montreal and Amman, which you could then combine with a flight to another Royal Jordanian destination after a stopover in Amman. The surcharges here are slightly more expensive, but not nearly as punitive as British Airways and Qatar Airways.

Note that Asia Miles sometimes makes it difficult to determine the fuel surcharge unless you have enough miles in your account to make the booking. 

In particular, if you can price out your journey using the one-way or round-trip search tools, then the website can successfully calculate the surcharge that you’d have to pay. But if you’re using the multi-city search tool to piece together a one-way redemption, then you’ll need to have the full mileage amount in your account before you can see the fuel surcharges. 

Advanced: Predicting Fuel Surcharges with ITA Matrix

If you’d like to get better at predicting how much you’d pay in fuel surcharges, then you’ll need to get familiar with the ITA Matrix tool, which is great for pricing out all the individual components of an airline ticket.

Let’s take an illustrated example, using the Lufthansa flights that we found on the Aeroplan search engine that we mentioned above.

image3 (2).png

To replicate this specific flight, we’ll choose the one-way search option and then fill in the origin and destination airports. Click “Advanced Controls” to specify the airline that you’re searching for – in this case, you’d enter “LH” for Lufthansa.

Then, select the date, number of passengers, and choose “business class or higher” for the class of service.

Clicking on the same 7:10pm departure as we found via Aeroplan, we get to see all the fare components that go into the price of the ticket.

Other than the base fare (which is denoted “Fare 1”), all of the other components could be charged as additional taxes and fees when redeeming miles for a ticket.

As we can see, both “YQ” and “YR” are carrier-imposed surcharge, but only the “YQ” amount of $585 is passed on through Aeroplan. Meanwhile, the other three types of government-imposed taxes are also an exact match to Aeroplan is charging. 

This was a simplified example, and you could of course use ITA Matrix to price out more complex multi-segment itineraries, However, the more complex your trip is, the less likely that the amounts displayed by ITA Matrix will be an exact match to what the award program ends up quoting you, due to the many multi-layered rules being applied to the fuel surcharge calculation. 

Conclusion

Fuel surcharges are the ultimate buzzkill in award travel, and there’s nothing more annoying than discovering a compelling award chart sweet spot only to be hit with hundreds of dollars in fuel surcharges at the final step.

In general, though, every award program will levy fuel surcharges in some capacity, but will also offer some way of avoiding fuel surcharges, depending on the airlines and destinations chosen. As long as you understand which airlines are the biggest culprits and which countries have regulations in place, you can almost always keep your taxes and fees in a reasonable range and maximize the value of your miles.

Ricky

Your email address will not be published. Required fields are marked *

Have an Account? Click here to Login