Fuel surcharges draining value from airline reward points

Discussion in 'General Discussion | Miles/Points' started by sobore, Apr 22, 2013.  |  Print Topic

  1. sobore
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    sobore Gold Member

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    http://canada.creditcards.com/credi...es-drain-value-airline_reware_points-1263.php

    Racking up points on your credit card's travel rewards program can be a good strategy for funding holidays. But fuel surcharges imposed by the airlines in the last few years can sink the best of plans for a "free" rewards flight abroad.
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    Fuel surcharges are extra fees tacked onto the price of a flight that are supposed to account for fluctuations in fuel costs. If you're paying out of pocket for a flight, you'll earn points on your whole ticket cost -- including the surcharges. But when it comes time to cash in your points, your
    rewards will only cover the price of the basic ticket. You'll have to fork over cash -- sometimes hundreds of dollars -- for the surcharge.

    "I get emails all the time from people complaining that fuel surcharges are insane, especially on flights to Europe," says Patrick Sojka, founder of the travel perk portal Rewards Canada. "A few Asian routes are pretty bad as well, but Europe and the U.K. are the biggest problems in terms of fuel surcharges."
    Critics argue that fuel surcharges are subjective and arbitrary, and erode the value of earned incentive points. Some also say that making fuel surcharges ineligible for reward redemption is illogical and unfair to consumers.

    "It is not a tax, and if consumers are able to accumulate reward plan credits when paying for the fuel surcharge on regular flights, what is the justification for applying the surcharge when redeeming those rewards?" asks Jonathan Bishop, a research analyst with the Public Interest Advocacy Centre.


    Read More: http://canada.creditcards.com/credi...es-drain-value-airline_reware_points-1263.php
     
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  2. jwsky
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    jwsky Silver Member

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    Fuel surcharges are just another bait and switch tactic. I can not believe someone would try to justify them. I mean, why not have a tire surcharge, or one for paying the crew. I can understand a temporary surcharge, but these expenses just are part of everyday business.
     
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  3. jfhscott
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    jfhscott Silver Member

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    Well, you can't particularly fight city hall.

    But, I can see fuel surcharges as a risk sharing device, whereby a fixed surcharge may be imposed if fuel (using some recognized benchmark) exceeds some price point - trouble is, the way they are set up now, their is no risk sharing element at all. They are just some arbitrary number which gets folded into the all in price of a ticket.
     
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  4. kyunbit
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    kyunbit Silver Member

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    The way I had understood fuel surcharge was that they were just a way to advertise lower fares, by dropping the YQ component from ads. In the current scenario, I don't even know why the airlines go through the headache of fuel surcharges given that the total price has to be advertised. Surely, it can't be profitable because a small fraction of people also hack the fares to get rid of YQ.
     
  5. iolaire
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    iolaire Gold Member

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    For a company like BA it has to be a fairly large revenue generator. Just as a method of making “free” award tickets not “free” it would be completely worth it, much more rewarding that say adding change fees.

    Also I wonder if by building the cost in as a Fee if they might also transfer some revenue from code-share or co-ticketed itineraries into their pocket? i.e. does AA really transfer as much for your fare on BA metal versus the “fee”?
     
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  6. l_ark

    l_ark New Member

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    US carrier usually doesn't have fuel surcharges. But others do have a hefty fuel surcharge when redeeming award poings. aka YQ etc
     
  7. In terms of using CC rewards, AMEX allows you to use all your points towards an airfare and it includes the fees.

    I'm not so sure the airlines are totally to blame for all surcharges. Airort taxes in Canada are becoming userous and all UK airports have a graduated airport tax where a J fare, whether on a paid or reward ticket are now approaching $300. Unfortunately many other of the world's airports will soon catch up.
     
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  8. Jimgotkp
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    Jimgotkp Gold Member

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    This is why I like to earn/redeem US/UA/AA miles and avoid LHR at all costs :) If I want to go to LHR then I will just fly into CDG and take the rail, since it saves me hundreds of dollars and I like train rides.
     
  9. srdshelly

    srdshelly Silver Member

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    These fuel surcharge airlines do not offer reward tickets; they only offer somewhat discounted tickets. As a customer, I won't get involved in their programs (always credit mileage to an alliance partner); and I think those who write about programs should always offer strong caveats. If it costs 50.000 miles to fly a round-trip from X to Y with a $500 "fuel surcharge", I consider that equivalent to a 100,000-mile redemption cost. Even Skypesos are worth more than these carriers' mileage currencies.
     
  10. gleff
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    gleff Co-founder

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    While I don't think it'll change practices, there's currently a class action lawsuit winding its way through the courts against British Airways for their fuel surcharges based on misrepresentations of fuel surcharges as gov't taxes as I understand it.
     
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  11. Boraxo

    Boraxo Silver Member

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    We need to start one on behalf of all the Chase cardholders that were defrauded. YQUEM was never disclosed when they first offered then100k sign up bonus a couple of years ago.
     

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