Air Miles doesn’t levy fuel surcharges when flying within North America (including the Carribean and Hawaii), which is great for award tickets. On the other hand, Air Miles does levy fuel surcharges when flying overseas, which make up a large portion of the additional fees you must pay.
For redemptions within North America (including the Caribbean and Hawaii), the fuel surcharge or carrier-imposed surcharge is included within the Air Miles you redeem, so you only have to pay the additional government-imposed taxes and airport improvement fees.
On the other hand, when flying overseas, the fuel surcharge is not included as part of the Air Miles you redeem, and the must be paid separately on the side. This surcharge makes up the majority of the higher fees you must pay on overseas Air Miles redemptions.
Unlike Aeroplan or other award programs, there’s no way to avoid the fees by flying certain airlines, since Air Miles only partners with airlines that have similarly high surcharges when flying overseas (Air Canada, United, British Airways, KLM, Delta, and Air France). The program doesn’t include flights on airlines with lower surcharges, such as Icelandair, LOT Polish Airlines, or Swiss.
As a result, the value in redeeming Air Miles primarily lies in intra-North America flights (including the Caribbean and Hawaii), since the fees are going to be significantly lower. Whenever you cross an ocean, you’ll have to pay the same fuel surcharge that shows up on a cash ticket, which greatly reduces the value of your Air Miles.
Using a companion voucher from the BMO Air Miles World Elite MasterCard can improve the value of the redemption somewhat, but you'll still be on the hook for the fuel surcharges on the second passenger’s ticket.
Last updated 19 May 2019. Any questions? Contact me.