Tuesday, January 14, 2014

5 Tips to Avoid or Mitigate Fuel Surcharges on Award Tickets

Rewards Canada was recently interviewed about Fuel Surcharges incurred on award/reward tickets from various loyalty programs.  Here on Rewards Canada this is a topic has been discussed frequently and in particular about Aeroplan, Air Miles and Avios award tickets and the large fuel surcharges that are tacked onto them.

Here are five tips to help you avoid or mitigate those fuel surcharges to make your award travel a bit more tolerable and easier on your wallet.

1. Be wise in which airline you choose for your award ticket
Canada's two best known travel reward programs are Aeroplan and Air Miles and while both programs have their merits, the typical complaint we hear from their members are about the fuel surcharges! Now, many people feel trapped as the sheer size the programs and ease of earning miles with them makes it hard to switch to other programs. Well you don't have to switch to avoid the surcharges, you just have to avoid certain airlines within each program.  Aeroplan has dozens of flight partners and the ones that charge either no or have a much lower Fuel Surcharge are United, Air China, Brussels Airlines, EgyptAir, Ethiopian, EVA Air, Scandinavian, Singapore, Swiss, Turkish and US Airways but they cease being an Aeroplan partner as of March 30. For Air Miles you can avoid the fees by trying to redeem the miles on American Airlines or Alaska Airlines.  As an example, last week we talked about the differences for travel on Air Canada and Air Canada's partners. You'll see there is a saving of over $300 when flying Vancouver to Taipei on EVA Air (an Aeroplan partner) or with Air Canada and EVA Air via Hong Kong.
Aeroplan Economy Class redemption on EVA Air - only $57.91 in fees

Aeroplan redemption that includes Air Canada flights - Fees are over $300 more than EVA Air

For flights within Canada you can stick to Air Canada with Aeroplan as the charges typically aren't that much or both WestJet and Air Canada for Air Miles redemptions.

2. Cover those fuel surcharges with another reward program
There are credit cards out in the Canadian market that allow you to book travel how you want and with whomever you want followed by redeeming your credit card points against the charge when it shows up on your statement. Which means you can book an award ticket with Aeroplan or Air Miles and pay for the taxes/fees (which of course include the fuel surcharge) with one of these credit cards. Once those show up on your account go online or call up the credit card issuer and redeem your points against that charge. Are the points better used elsewhere? They definitely can be but for some of you, we know you have your heart set on certain travel plans in certain travel classes (ie Business Class) so this option is a good way to keep some money in your wallet.  For more details on this method and a list of cards that allow you to do this please see our post on Which credit cards can be used to cover award ticket taxes, fees and surcharges?


3. Switch frequent flyer programs
If you travel a lot one of the best ways to get around the fuel surcharge issue is to switch your frequent flyer program. For example, United's MileagePlus program is very good option for current Aeroplan members despite their own recent devaluation. Compare an Aeroplan award between Toronto and London UK on Air Canada with the exact same one from United MileagePlus. The flights are the same, the mileage amounts are the same but the United redemption is nearly $500 less.
Aeroplan redemption YYZ-LHR



MileagePlus redemption YYZ-LHR


4. Avoid frequent flyer programs
This option is for those who don't travel so frequently where option #3 is unreasonable (ie it is very hard to earn United MileagePlus miles in Canada if you don't travel) it is to move to a credit card based program much like those mentioned in option #2. Here on Rewards Canada we call these credit and charge cards "Travel Points' cards and there are many to choose from in our market. You can see them all on our Travel Points Credit Card Comparison Chart and also on our Top 5 picks in Canada's Top Travel Rewards credit cards. Essentially what all these cards do is allow you to travel with a lot more flexibility (even though the flexibility ranges greatly between the cards themselves, see this post for more details). You get to pick the dates you want to fly, the airline you want to fly on and since they are revenue tickets the fuel surcharge is usually built into the actual (not broken out like an award ticket) and in many cases you'll even earn frequent flyer miles on the flights themselves. Now, we're not saying to ditch Aeroplan and Air Miles altogether since their sheer size and breadth of earning and redeeming opportunities in Canada cannot be avoided but one or both of these programs may just slide down to your secondary or tertiary program(s) of choice.

5.  Weigh your options
Above all else you need to look at your options. You want to fly direct Toronto-London but are not a member of United MileagePlus and the Aeroplan fees of $711 along with the required miles doesn't justify the redemption you are most likely better off buying the ticket outright. Another option to consider is to eat the fuel surcharge on award ticket. If an Aeroplan or Air Miles award ticket for a direct flight on Air Canada has $700 in fees but you can choose to route via the U.S. on United for a couple of hundred dollars, is that $500 savings worth clearing U.S. customs on both routes, and/or the possibility of missing a connecting flight or having your luggage lost during that connection. For a family of four it can amount to a huge amount of savings but for one self employed person traveling on business it may not be worth the savings. There is one hidden trick however to getting around fuel surcharges with Aeroplan for flights that do have a fuel surcharge  (well at least on the return portion) and that is to book a flight on one of the partners that doesn't charge the fuel surcharge and once traveling you can change your Aeroplan itinerary for the return portion (subject to availability of course) for a change fee of C$90 to a more direct flight if you so choose. In most cases that $90 is less than the multiple hundreds of dollars that could have been incurred is you chose that same return flight during your original booking. Apparently this trick does not work anymore

9 comments:

  1. Great tips! I would add one trick I recently used:
    I wanted to use Aeroplan points for a flight in South America, but Aeroplan didn't have any tickets listed on its website. So, I found the flights I wanted on the United 'awards tickets' website, then called Aeroplan and quoted the exact flight numbers. Sure enough, they found them! It costs $30 per ticket to book over the phone, but that's peanuts compared to what fuel charges usually are.

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  2. Borderfreetravel.comJanuary 14, 2014 at 3:23 PM

    As usual great advice Patrick. For those of us in border cities, I have found flying out of the USA to USA destinations is significantly cheaper than say flying out of Toronto on Aeroplan and Avios for those "extra" fees.

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  3. In your discussion about the airlines with low or no fuel surcharges, you state " they cease being an Aeroplan partner as of March 30". Can you elaborate? Which airlines are you referring to?

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  4. Strictly US Airways as they are joining the oneworld alliance the day after that since they are in the process of merging with American Airlines

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  5. You suggest booking with an Aeroplan flight partner that has lower surcharges/fees — but how do I do this? When I use Aeroplan's online booking system, almost always the only choices offered are AC flights and no partner flights. To get a partner flight, do I have to make the booking by telephone?

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  6. Online it can be done but it is painful at times. Calling in is a good
    way to do it, they'll charge you a phone in fee but it is way less than
    the surcharges on AC tix!

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  7. Jean-Paul GinestierMay 6, 2014 at 8:15 PM

    Like a lot of Canadians, I got persuaded recently to switch to Aventura from Aeroplan because I can "fly on any airline" I have just looked at their rewards site and found to my horror that "taxes and fees" (which of course includes a massive, disgusting and unethical "fuel surcharge") for Toronto to Paris are over $600, and identical to the penny for every single airline on offer. This suggests the folks at Aventura are stealing from us.

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  8. You can use your Aventura points to cover the taxes and fees, but only
    at 100 Points to $1 so you are only getting a 1% return at that point
    and eroding the value of your points that you used for the base fare. I
    tend to prefer the cards that allow you to use points towards taxes and
    fees at the same rate as the base fare (BMO World Elite, Amex Gold
    Rewards Card, Capital One Aspire etc.) plus they allow for partial
    redemptions without loss of point value

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