Aeroplan customer raises concern over fuel surcharges

Discussion in 'Air Canada | Aeroplan' started by Sammich, Jan 20, 2014.  |  Print Topic

  1. Sammich

    Sammich Gold Member

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    http://www.cbc.ca/news/canada/aerop...oncern-over-fuel-surcharges-1.2504541?cmp=rss
     
    Last edited: Jan 20, 2014
  2. tomh009
    Original Member

    tomh009 Gold Member

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    It's not news ... but I guess it's nice that CBC has picked up on it. Not that I expect any change from that.
     
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  3. Sammich

    Sammich Gold Member

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    Yeah not really news at all. I was trying to redeem a BA award ticket from YVR to LHR a while back. Surcharge was about 1.1k CAD for a Y ticket...
     
  4. slalom

    slalom Silver Member

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    I think this is a big deal, and getting some media consumer advocates to make some noise would help. I recently priced out YYZ-Dubai reward itineraries, and it was bizarre - "extras" for a Y class were almost $1500, and J were only $900 for the same routing - how can this be related to any actual fees/surcharges.

    When I priced the itinerary without any Air Canada leg (typically only YYZ-EWR) I got an Egyptair routing through Washington with $154 surcharge.

    Makes no sense and can't be related to anything other than margin enhancement. This is like the mobile phone carriers "network access fees" that was positioned as a tax, but wasn't.
     
  5. blackjack-21

    blackjack-21 Gold Member

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    Today Air Canada (and Sunwing) announced a "Currency Surcharge" because of the weaker Canadian Dollar against the U.S. So in addition to the YQ fuel surcharge which always goes up, never down when fuel prices fall, now they're adding a new one. What next, are we going to see a Ryanesque "lavatory surcharge" for us L class passengers? (I always suspected that L class really stood for "Lavatory Class" in the past).
     
  6. blackjack-21

    blackjack-21 Gold Member

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    In all fairness, today Westjet announced a fare increase of 2% to cover increased currency differences.
     
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  7. tomh009
    Original Member

    tomh009 Gold Member

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    Basically this is an increase in the fuel surcharge in all but name, the fuel is by far the biggest USD-denominated cost for the Canadian airlines.
     
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  8. blackjack-21

    blackjack-21 Gold Member

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    Do none of the Canadian refiners up here produce Jet-A that can be bought and paid for in Canadian dollars, thereby at least in part eliminating the need for U.S. funds to purchase the fuel? While I understand that long distance flights may need to refuel at overseas or other distant airports and that fuel is also paid for in U.S. dollars, still MOST of AC's fleet that travels transborder probably hold enough fuel for a round trip without having to refuel in the U.S., thus saving somewhat on that portion of the currency exchange. Or am I oversimplifying the possiblity of AC's (and Westjet, Sunwing) saving some money on fuel costs, as the cost of fuel, even here in Canada, is always denominated in U.S. dollars?
     
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  9. YULtide

    YULtide Gold Member

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    Even if jet fuel is priced in Canadian dollars, or Bitcoins or whatever, the underlying commodity - oil - is priced in US dollars. So, if the US dollar goes up against the Canadian dollar, the price of oil and its derivatives such as gasoline and jet fuel go up. And if the Canadian dollar rises against the US dollar, the fuel charges will not drop because the airlines don't have a mechanism to drop these charges. (Instead, they would claim the cost savings are a result of the CEO's brilliance, so he deserves a higher bonus.)

    And even if a plane could carry enough fuel for a return trip, afaik there are a couple of good reasons not to. One is that the extra weight of caryying fuel not needed for the trip woud waste fuel, which would more than offset any savings on currency (of which there would be none anyway). Another is that you don't want to be landing with half-full tanks. Just in case. Others who are more knowledgeable about aviation may be able to expand on this and correct any errors in my understanding.
     
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  10. tomh009
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    tomh009 Gold Member

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    You are indeed correct, sir! ;)
     
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  11. 2by4

    2by4 Silver Member

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    Just about every airline that I have dealt with has a computer program or charts that take the price of fuel at origin and destination, the cost of carrying extra fuel and then estimate if it is worth 'tinkering fuel' from one airport to another.
    The cost of carry is about 3% per hour, so a YYZ-MIA flight would need a 10% favourable price in MIA to tanker any fuel out of YYZ.
     
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  12. blackjack-21

    blackjack-21 Gold Member

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    Thanks for everyone's replies. Puts my theory to rest with their helpful answers.
     
  13. tomh009
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    tomh009 Gold Member

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    Extra weight is a killer for fuel costs. That's why we get not only plastic planes but also things like pax-supplied IFE and lightweight seats.
     
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  14. YULtide

    YULtide Gold Member

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    I'm just pricing YYZ-TXL. Here's the options:

    Aeroplan = 60,000 miles + $692.56

    Fees:
    Germany airport security $18.50
    Germany Domestic Passenger Service Charge $52.00
    Fuel Surcharge $476.00
    Canada Airport Improvement Fee $25.00
    Canada HST $3.25
    Canada security $25.91
    Germany International Passenger Service Charge $26.30
    Germany Air Transport tax $65.60

    Air Canada = $1172.36
    Actual ticket $474.00
    Fuel Surcharge $476.00
    Taxes and fees $222.36
    Germany airport security $18.53
    Germany Domestic Passenger Service Charge $52.02
    Canada Airport Improvement Fee $25.00
    Canada HST $3.25
    Canada security $25.91
    Germany International Passenger Service Charge $32.08
    Germany Air Transport tax $65.57

    A couple of comments:

    1) It's odd that there is a discrepancy in the taxes. Some of it is rounding, but there's also a $5.78 difference in the Germany International Passenger Service Charge between Aeroplan and Air Canada. Odd.

    2) Fuel appears to cost more than all the rest of the flight components combined.

    3) 60,000 mles just buys you a discount of $479.80 on this itinerary. Hardly a free flight.
     
  15. tomh009
    Original Member

    tomh009 Gold Member

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    Well, not the actual fuel cost but, yes, the fuel surcharge is bigger than the ticket cost itself. Is this just to generate more revenue from AP redemptions, or for some other reason, I don't know.

    Quite. This game isn't as much fun as it used to be ... especially the value/mile for TATL/TPAC Y rewards is nothing to write home about. Recently I have been redeeming for Caribbean Y and TATL J instead.
     
  16. YULtide

    YULtide Gold Member

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    I looked at J and for the date I would be interested in they'll play the game of giving me a J ticket to YUL and then shifting me to Y for the rest. And still charge an extra 30,000 miles. No thanks.
     
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  17. tomh009
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    tomh009 Gold Member

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    Yes, that happens. For TATL/TPAC redemptions, date flexibility really helps. For YYZ-AGP, I got two J seats on both TATL segments by some small date adjustments, but conceded the AGP-FRA segment as intra-Europe J isn't all that valuable anyway.
     
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  18. YULtide

    YULtide Gold Member

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    Unfortunately there's not much date flexibility on this particular trip. :(
     
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