Which Countries Regulate Fuel Surcharges?

I originally wrote about this back in July 2017, and lots has changed since then. Here’s an update for 2018.


For people who travel on points, fuel surcharges or carrier-imposed surcharges are the ultimate buzzkill. 

They were originally introduced in times of rising fuel costs, and when the price of fuel decreased in recent years, airlines decided to keep tacking them onto award bookings in order to line their own pockets.

Thankfully, savvy travellers know that they can avoid fuel surcharges by redeeming their miles on different partner airlines. For example, if you’re looking to redeem Aeroplan miles, you’ll want to avoid Air Canada, Lufthansa, and Austrian Airlines for their sky-high fuel surcharges.

But besides choosing your airlines wisely, you may also benefit from taking advantage of fuel surcharge regulations around the world.

Some governments and civil aviation authorities are particularly consumer-friendly and have implemented legislation that either regulates how much fuel surcharges an airline is allowed to levy, or bans it outright.

Let’s go through each of these countries and examine how you could benefit from their regulations to save yourself a good chunk of change when using your miles to visit. 


1. Australia

Australia has strict regulations on fuel surcharges that applies to all departing flights. When you book a one-way trip departing Australia, the fuel surcharge will be limited to $15:

 
 

Similarly, if you book a round-trip originating in Australia, your fuel surcharges will be limited to a total of $30. If you regularly travel to Australia, you can take advantage of this to obtain surcharge-free travel on the Ari Canada Dreamliner as long as your tickets originate there.

 
 

It’s not just Air Canada either – different airlines seem to be subject to different limitations. For example, Thai Airways normally levies a small amount of fuel surcharges (about $100-150 per direction), but $0 when departing from down undah’:

Meanwhile, ANA would also be happy to collect surcharges from you, but it’s limited to a paltry $1.30 when departing from Sydney. Clearly, different airlines are subject to different limitations under Australia’s regulations.

 
 

Unfortunately, flights TO Australia are not subject to the regulations, and the usual surcharges will appear:

Nevertheless, this trick can be very useful if you’re planning an Australia trip – for example, you could fly Cathay Pacific using Alaska miles with a stopover in Hong Kong on the outbound, and then fly Air Canada on a direct flight home, with minimal surcharges to pay.


2. Philippines

The Philippines banned fuel surcharges back in 2015, but there’s not many Star Alliance carriers flying there, and most of the ones that do (Turkish, United, EVA, Air China, etc.) already don’t levy surcharges anyway.

The exceptions are Asiana and ANA, which usually have surcharges of about $100 on intra-Asia flights, but are reduced when originating in Manila. So keep this in your locker if you ever need to get from Manila to Tokyo in a pinch (perhaps part of an Aeroplan Mini-RTW?)

Air Canada doesn’t fly to the Philippines, but what happens if you include an Air Canada flight on a larger itinerary that departs from the Philippines?

The answer is that the surcharges are reduced but not fully eliminated. Compare PEK–YYZ ($258 in surcharges)…

 
 

…with MNL–PEK–YYZ ($180 in surcharges).

 
 


3. Japan

A while back, fuel surcharges were banned in Japan. Then in 2017, the government changed the outright ban into an $80 cap per direction. As the price of fuel has crept back up, the cap now appears to have been raised to about $160 per direction – $163.80 to be precise.

 
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That means that you’ll pay at most about $327.60 in fuel surcharges on a round-trip departing from Japan:

 
 

To be honest, a cap of $160 per direction isn’t all that useful, since many airlines have surcharges of about $100-150 that still feel quite annoying to pay, but it’s better than nothing. 

The good news with Japan is that the regulation applies on inbound flights on Air Canada as well. In fact, rather curiously, the surcharge appears to be even lower in this case ($260 vs. $327): 

 
 

The $160 cap seems to be applied across the board to all airlines, which means you can even use it to snag Lufthansa First Class at a lower cost than usual!

 
 

Note that not all airlines are subject to the regulations on the inbound to Japan.

Indeed, you can compare the difference in surcharges between British Airways’s ludicrous surcharges on the LHR–HND route…

…and the drastically lower surcharges in the opposite direction:


4. Taiwan

Taiwan has recently implemented strong fuel surcharge regulations. The Air Canada surcharge seems to be limited to $68.70 per direction: 

 
 

That means a round-trip originating from Taiwan will cost you $136.40 in surcharges. Note that the Air Canada flight doesn’t have to be touching Taiwan for this surcharge to apply – in the below example, the routing is TPE–YVR for the outbound before YVR–ICN–TPE on the return.

The Taiwan regulations cause the surcharges on YVR–ICN to be dropped as well, even though it’s a flight between Canada and Korea that otherwise would incur surcharges.

 
 

Like Japan, the regulation applies on inbound flights TO Taiwan as well, meaning that you can fly Air Canada without paying an arm and a leg in surcharges if Taiwan is your final destination. Again, curiously the surcharges are even lower in this case ($43 vs. $69).

 
 

An interesting thing happens when you position an open-jaw adjacent to Taiwan. As long as Taiwan remains the “destination” of your ticket (i.e., it’s the farthest point from your origin among your stopovers and open-jaws), then the fuel surcharge regulation will still take effect on the entire itinerary!

 
 

That means that you can leverage Taiwan’s regulations to “kill” the surcharges on flights departing from a separate jurisdiction, as in the above example – the return flights from Shanghai would normally incur hefty surcharges, but since Taiwan is the end-point of the broader itinerary, they don’t.

This trick could be an especially useful one to keep in mind if you’re planning an Aeroplan Mini-RTW trip to Asia.


5. Hong Kong

Hong Kong used to have an outright ban on fuel surcharges, although that was relaxed as of November 1 of this year. Right now, you can still enjoy savings on fuel surcharges when departing Hong Kong, although it’s unclear whether that’s because Hong Kong still has some limitations on the surcharges (and just isn’t banning them outright), or whether the airlines simply haven’t gotten around to adding their fuel surcharges back yet.

In particular, Air Canada flights seem to be limited to $110 in fuel surcharges per direction:

 
 

That means $220 in fuel surcharges for a round-trip:

 
 

If Hong Kong does still have regulations, it seems to only apply on flights originating there, since Air Canada flights TO Hong Kong do in fact incur the loathsome added surcharges:

Looking at British Airways Avios, we see that British Airways flights departing Hong Kong remain subject to reduced fuel surcharges, even though the ban was supposedly lifted on November 1. 

My guess is that the ban was lifted very recently, so the airlines mostly just haven’t gotten around to adding the surcharges on their Hong Kong routes yet.

Therefore, if you do want to take advantage of the current limbo-state with regards to fuel surcharge regulations, I’d recommend booking sooner rather than later.


6. Brazil

Brazil is a notoriously consumer-friendly country, and you can usually count on them to stand up for the average consumer against the whims of multinational corporations. Banning airline fuel surcharges is no exception, and it’s something they’ve done since 2010.

Brazil’s regulation has been an outright ban since the very beginning, and as far as I know that hasn’t changed.

But there’s something strange happening.

Indeed, British Airways is playing by the rules…

…and Lufthansa is playing by the rules…

…but Air Canada is brazenly adding a fuel surcharge of $200 per direction! 

 
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To be honest I’m not sure what’s happening here.

Perhaps Brazil recently changed their laws and Air Canada was the first to act and bring their surcharges back up. Or perhaps Air Canada simply decided to see if they could get away with it, and someone ought to report them to Brazil’s consumer rights enforcement agency. 

It’s also possible that Air Canada reached some sort of agreement with Brazil’s civil aviation authorities to allow them to charge $200 when other airlines are banned from charging anything. I find that the most likely, although there’s precious little information on this stuff to back it up.

Brazil’s surcharge waiver has historically been a great way to redeem Aeroplan miles to South America for good value, but it’s definitely less useful now that Air Canada’s rogue $200 surcharge has appeared. In any case, it’s good to keep it in mind if you want to stitch together a complex itinerary around the world involving South America and other continents.


Conclusion

To be clear, when I’m redeeming miles for business class and First Class flights around the world, I don’t mind paying an additional $100 or $200 here or there, since I’m still getting spectacular value for my miles. It’s really the principle of fuel surcharges that annoys me and other travellers who use points – they’re nothing more than a cash-grab by the airlines and are downright unfair to the average consumer. 

It’s great to know that several countries around the world recognize this as well, and by taking advantage of these “surcharge havens”, you can attain significant savings compared to the fuel surcharges you’d normally pay. With the cost of fuel back on the rise, the overall trend seems to be that these regulations are getting looser and looser, so do your best to take advantage while you still can!