Redeeming miles and points for First and Business Class tickets around the world is incredible – you can fly in luxury for little. However, the biggest problem that many people have when using miles and points for a ticket is that sometimes massive fuel surcharges are required and therefore the redemption may not be ideal. After all, paying 57.5k miles + $800 for a one-way Business Class ticket to Europe doesn’t sound great when you could buy a ticket outright for around $1,300 (sometimes round-trip). The good news is that there are ways to avoid fuel surcharges on award tickets – whether that’s booking through a different program or starting your journey in a country that regulates these surcharges.
What Are Fuel Surcharges?
A fuel surcharge on an airline ticket is theoretically supposed to cover the cost of the fuel required to fly you from point A to point B. However, it realistically no longer works like this because when the price of fuel went up, so did the fuel surcharges on airline tickets, but when the price of fuel went down, the surcharges didn’t. Instead airlines just renamed these charges as “carrier-imposed” and they get to keep the difference and the passenger is still going to pay more than what the fuel actually costs since these charges aren’t really regulated.
Fuel Surcharges & Components of an Airline Ticket
Some airlines require massive surcharges on tickets, but in reality it all is a combination of factors including:
- the airline you fly
- where you depart / your route
- what cabin you fly
- the program you book through (on an award ticket)
There are three components of an airline ticket:
- the base fare
- carrier-imposed/fuel surcharges
- mandatory airport and government taxes and fees
When redeeming miles, the base fare is always covered by the miles and you always have to pay the mandatory airport and government taxes and fees. However, whether or not you pay the fuel surcharges when redeeming miles depends on the frequent flyer program you book through – though there are some exceptions to this rule, for example, British Airways requires all partner airlines to collect fuel surcharges on award tickets.
Avoiding Surcharges: Book Through a Partner Program
In most cases whether or not you end up paying surcharges on award tickets depends on the frequent flyer program you are booking through (some exceptions to this rule – see above). For example, even though Lufthansa has massive fuel surcharges on flights from North America to Europe and pass those on to their own members using miles, if you redeem United miles for the same flight, you won’t pay any fuel surcharges because United’s frequent flyer program doesn’t impose them on any award ticket.
some programs that never charge fuel surcharges:
- Air Canada Aeroplan
- Avianca LifeMiles
- United MileagePlus
some programs that sometimes charge fuel surcharges:
- American Airlines AAdvantage
- Air France/KLM Flying Blue
- Lufthansa Miles & More
With the programs that sometimes charge surcharges, it all depends on the airline you fly, your route, etc. For example, if you use Lufthansa miles on a domestic United flight, you won’t pay any fuel surcharges but if you redeem the same miles for a long-haul United flight, you will pay surcharges.
In another example, American Airlines doesn’t require surcharges on award tickets on most partner airlines – however, they do if you use your miles for British Airways and a few others.
Reduce Surcharges: Start Your Journey In Select Countries
There are a few regions around the world that have regulated fuel surcharges and have massively reduced them according to law – so airlines must follow. If you begin your journey in one of these regions, you will pay low or no fuel surcharges. However, this usually does not apply in reverse – because those countries/regions can only regulate the surcharge when you depart.
Places that limit/reduce fuel surcharges include:
- Australia
- Argentina
- Brazil
- Hong Kong
- Japan
- South Korea
- Taiwan
- New Zealand
There may be a few other places as well, so this list isn’t complete. If you book an award ticket from one of these places, expect to pay low or no surcharges, even on airlines or programs that normally pass them on.
Basically, the highest surcharges in the world exist when you fly from North America to Europe. When you use your miles and points in other regions of the world, or when you return from Europe back to North America, in most cases they are reasonable and most people won’t have a problem paying them – especially if you are flying in Business or First Class. Nevertheless, the closer your ticket is to “free” when using miles, the better, and therefore it is always important to do your research about how you can maximize your miles.