An airline ticket price is composed of three different parts – the Base Fare, the Carrier-Imposed Surcharges, and the Mandatory Government & Airport Taxes/Fees. All three of these added up together make up your total ticket price – some airlines also charge credit card or payment processing fees on top of the total ticket price, just to squeeze even more money out from you. It is important to understand the various components of an airline ticket price/fare because some of these are passed on to you when you book a ticket with miles/points.
Airline Base Fare
The base fare is the actual cost of the ticket that the airline will keep for flying you somewhere. The airline receives this amount from the ticket and keeps all of it. This fee essentially covers you being flown somewhere in a seat on their flight.
When you redeem miles or points, the base fare is always covered by the miles/points – it is never passed on to you to pay.
Carrier-Imposed Surcharges (Fuel)
A lot of airline tickets add on a carrier-imposed surcharge (otherwise known as a fuel surcharge). This was critical on tickets when the price of fuel was sky high and airlines adjusted this fee as they saw fit. In reality, this is a junk fee that the airlines add on to the ticket because they can and because they get to keep most of this price component – sure, some of this component may go to pay for your fuel on a given flight, but in a lot of cases the fuel surcharge component on a ticket does not match what the fuel would actually cost on your given routing.
Some fuel surcharges can be decent while others could be sky-high – it is important to pay attention to this because when it comes to award tickets, sometimes the fuel surcharge is passed on to you and you are responsible for paying it. There are airlines that charge significant carrier-imposed surcharges, while there are other airlines where the surcharges are relatively low. When it comes down to an award ticket, the frequent flyer program that you’re booking through determines if you’re charged fuel surcharges and not the airline you are flying.
Mandatory Government & Airport Taxes/Fees
The third component of a ticket price are the mandatory government and airport taxes and fees. These include things like airport operating costs, security screening costs, fees to improve and develop the airport, government/country tourism taxes, etc. You are always responsible for paying these – whether flying a revenue ticket or an award ticket, these taxes will always be passed on to you and you will have to pay them.
These taxes and fees vary widely and depend on where you are flying from and to, and also where you are transiting. Taxes are generally higher when flying internationally than domestically – there are countries that have no mandatory domestic flight taxes/fees and then there are countries where these fees are extremely high.
Airline Payment/Credit Card Processing Fees
Perhaps the biggest junk fee out of all of these fees is when an airline adds a payment or credit card processing fee. This fee is usually not shown to you until you type in your credit card details and billing address – then the price of your ticket magically can go up by some amount. Some airlines charge a fixed fee, while others charge a percentage of the transaction. Regardless, these fees are yet another way an airline can squeeze money out of you – even at the very last step before confirming a flight.
Airline Ancillary Fees/Services
The ancillary fees and services are an add-on to your ticket, but they aren’t required. These fees include things like:
- seat selection
- baggage allowance
- early boarding
- on-board catering
- priority airport services
All of these add-on fees will be issued separately to your ticket and are not a part of your standard ticket price. You have the option to add these on during your ticket purchase process or after booking, but they aren’t required to be purchased.
Example Fare
Let’s take a look at an example fare and ticket price. This ticket is as follows:
- Seattle to London
- British Airways
- One-Way
- Business Class
The following components make up the total ticket price and fare:
- Base Fare: BA SEA-LHR (Business): $6,189.00
- Carrier-imposed surcharge (YQ): $955.00
- United States Passenger Civil Aviation Security Service Fee (AY): $5.60
- US International Departure Tax (US): $21.10
- US Passenger Facility Charge (XF): $4.50
The total ticket price comes out to $7,175.20.
Since this is a Business Class ticket, the base fare is obviously expensive at ~$6k – this part is always covered with miles and points on an award ticket. British Airways loves to charge high fuel surcharges and those are $955 on this ticket and as you can see, they do not match what your actual fuel use for this flight is (instead the airline just keeps the additional revenue). Depending on the frequent flyer program you are using, these fuel surcharges can be passed on to you to pay. Then the final component are the mandatory taxes and fees, which are very mild in this case – these always get passed on to you when redeeming miles.
All in All
It is important to understand all of the components that make up an airline ticket as these are crucial to understand when you get into more advanced miles and points aspects. Looking at the revenue ticket cost and taxes can also help you estimate how much your award ticket might cost if you know how to read the fare and components. The biggest use out of this may be to have a look at the fuel surcharges on tickets and then you’re able to determine whether an award ticket is worth it or not (if high surcharges are passed on to you). Keep in mind that the rules on revenue tickets and award tickets can vary widely – with award tickets being more flexible in most cases should you need to modify.