What Is A Fuel Surcharge? – Forbes Advisor

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors’ opinions or evaluations.

As anyone who’s booked an award flight with miles knows, “free” flights are rarely free. With few exceptions, you always have to pay some amount of taxes and fees when using airline miles to book an award flight.

However, some airline award tickets are a lot more expensive than others. And that can be especially true when booking international award flights. Some of this extra expense can be chalked up to high airport taxes and fees—such as on premium cabin flights departing London.

Another source of high out-of-pocket costs: fuel surcharges. These airline-imposed fees can add hundreds or sometimes over a thousand dollars in extra costs on what was supposed to be a “free” flight. But, the good news is that there are ways to avoid these fees. Let’s show you how.

Find the Best Travel Credit Cards For 2022

Find the best travel credit card for your travel needs.

What is a Fuel Surcharge?

Technically levied as “carrier-imposed surcharges,” a fuel surcharge is the generic term for extra fees that some airlines charge in addition to the base airfare. This arbitrary fee is decided on by each airline and generally depends on the route.

If you’re paying cash to book a flight, fuel surcharges are irrelevant. That’s because airlines are required by law to show the total price for a flight—including taxes, government fees and any fuel surcharges. So, it really doesn’t matter if you’re paying $0 or $1,000 in fuel surcharges. The advertised price is the price you’ll pay.

That’s not true when booking flights with airline miles. Although the award chart may show a mileage price for a route, that’s just one component of what you’ll pay. And fuel surcharges can make an amazing-sounding award—like New York to London for just 20,000 Virgin points round-trip—a lot less attractive by adding over $400 in taxes and fees.

Why Fuel Surcharges Aren’t Called “Fuel Surcharges” Anymore

Although “carrier-imposed surcharges” are commonly referred to as “fuel surcharges,” there’s an important distinction between the two. While carrier-imposed surcharges can be charged arbitrarily, “fuel surcharges” are regulated by the US Department of Transportation.

In 2012, the DOT provided guidance to airlines on how they could charge fuel surcharges:

“When a cost component is described as a fuel surcharge, for example, that amount must actually reflect a reasonable estimate of the per-passenger fuel costs incurred by the carrier above some baseline calculated based on such factors as the length of the trip, varying costs of fuel, and number of flight segments involved.”

To charge a “fuel surcharge,” airlines must disclose to passengers how the fee is calculated, and the fee must be “based on the carrier’s actual paid enplanements and fuel expenditures.”

In 2013, a group of travelers filed a complaint with the Department of Transportation showing that British Airways charged fuel surcharges that were impermissible under these DOT rules. In the class-action lawsuit that followed, British Airways denied any wrongdoing but settled with travelers for up to 2.2 billion Avios—or $27 million under the cash option.

British Airlines and other airlines that charged fuel surcharges had an easy solution: rebranding “fuel surcharges” as “carrier-imposed fees.” That way airlines could charge the same amount (or more) but without having to justify the fee to the Department of Transportation.

Fuel Surcharges on Award Bookings

When booking an award flight using airline miles, you need to figure out two different costs: the price miles and the out-of-pocket cost (taxes, government fees, fuel surcharges). The amount of fuel surcharges levied on an award can have a huge impact on your out-of-pocket cost.

Whether or not you’ll pay a fuel surcharge on an award booking depends on a few aspects:

  • The airline that you’re flying on
  • The country or region you’re departing from
  • The mileage program you use to book the award

For domestic awards within the US, you generally don’t have to worry about paying fuel surcharges. Unless the mileage program charges extra fees, your out-of-pocket cost is typically just the $5.60 government security fee that’s required to be charged each way for all airline tickets.

Which Airlines Have High Fuel Surcharges

The easiest way to avoid paying fuel surcharges is to avoid an airline that charges fuel surcharges on its awards. The airlines with the most notoriously high fuel surcharges include:

  • Lufthansa: $750 in taxes/fees for business class one-way from New York to Frankfurt
  • SWISS Air Lines: $750 in taxes/fees for business class one-way from New York to Zurich
  • Austrian Airlines: $750 in taxes/fees for business class one-way from New York to Vienna
  • Brussels Airlines: $750 in taxes/fees for business class one-way from New York to Brussels
  • Virgin Atlantic: $750 in taxes/fees for business class one-way from New York to London
  • British Airways: $729 in taxes/fees for business class one-way from New York to London

Which Airlines Have Reasonable Fuel Surcharges

Airlines that charge modest fuel surcharges include:

  • Air France: $219 in taxes/fees for business class one-way from New York to Paris
  • Asiana Airlines: $206 in taxes/fees for business class one-way from Los Angeles to Seoul
  • Emirates: $181 in taxes/fees for first class one-way from Los Angeles to Dubai
  • Japan Airlines: $133 in taxes/fees for business class one-way from Los Angeles to Tokyo
  • All Nippon Airways: $123 in taxes/fees for business class one-way from Los Angeles to Tokyo
  • Iberia: $122 in taxes/fees for business class one-way from Boston to Madrid
  • Cathay Pacific: $100 in taxes/fees for business class one-way from Los Angeles to Hong Kong

How to Avoid Fuel Surcharges

The airlines that charge fuel surcharges include some excellent airlines that you might consider flying even with those costs. The good news is that you still have two ways to avoid paying a fuel surcharge when flying these airlines. Either you can depart from a country that limits fuel surcharges or you can book through an airline mileage program that doesn’t pass along fuel surcharges.

Countries and Regions that Forbid Fuel Surcharges

Several countries and regions ban fuel surcharges from being levied on award tickets that originate in the country. Unfortunately the US isn’t one of these countries. But, this way around fuel surcharges can be helpful if you’re building a longer, multi-stop itinerary.

Countries that limit fuel surcharges to under $100 include:

  • Australia
  • Brazil
  • Hong Kong
  • New Zealand
  • Philippines

Other countries where you can frequently find awards with low fuel surcharges include:

  • Maldives
  • Saudi Arabia
  • South Korea
  • Thailand
  • Turkey

Mileage Programs that Don’t Charge Fuel Surcharges

The easiest way to avoid paying fuel surcharges when booking award flights is to book through a program that doesn’t pass along fuel surcharges. Here’s a quick summary of the top options.

United MileagePlus

For most US travelers, United MileagePlus is going to be a winner for booking awards that would otherwise have fuel surcharges. In addition to being a program Americans may be familiar with, United lets members book most partner awards online. Plus, United MileagePlus is a transfer partner of Chase Ultimate Rewards.

Instead of shelling out $700 or more for Lufthansa business or first class awards, you’ll pay just $5.60 out-of-pocket when booking through United:

Avianca LifeMiles

Avianca LifeMiles is another great program for booking awards that would otherwise carry fuel surcharges. Like United, LifeMiles doesn’t pass along surcharges on any partner awards. Even better, LifeMiles often charges even fewer miles than United MileagePlus.

For example, for the same Lufthansa award from Chicago to Frankfurt, LifeMiles charges just 63,000 LifeMiles in business class (vs. 80,500 United miles) or 87,000 LifeMiles in first class (vs. 121,000 United miles).

Plus, it’s easy to accumulate LifeMiles as Avianca’s mileage program is a transfer partner of:

  • American Express Membership Rewards (1:1)
  • Break Rewards (1:1)
  • Capital One Miles (1:1)
  • Citi ThankYou Points (1:1)
  • Marriott Bonvoy (3:1)

Air Canada Aeroplan

In November 2020, Air Canada overhauled its Aeroplan mileage program. One of the best changes that Aeroplan made was to eliminate fuel surcharges on all awards. That makes Aeroplan a great option for booking awards on Star Alliance airlines (eg Lufthansa) and non-alliance (eg Etihad) that charge high fuel partners surcharges.

Before this change, Aeroplan charged over $1,100 in taxes and fees to fly Lufthansa First Class from Chicago to Frankfurt. Now you only have to pay around $37 (C$46) in taxes and fees for the same award.

American Airlines AAdvantage

Seasoned points and miles travelers may be surprised to see American Airlines AAdvantage listed here. After all, British Airways awards still have significant fuel surcharges when booked using AAdvantage miles.

However, American Airlines doesn’t pass along fuel surcharges on its other airlines partners. That means you can book Cathay Pacific or Japan Airlines awards without having to pay virtually any out-of-pocket cost. And that’s good news as American Airlines offers excellent award rates on these incredible airlines.

For example, you can fly from the US to Tokyo in Japan Airlines business class for just 60,000 AAdvantage miles or first class for 80,000 AAdvantage miles each way. And you’ll pay just $5.60 in taxes and fees:

Using Points and Miles to Pay Fuel Surcharges

If you can’t avoid paying a fuel surcharge, you can still avoid having to pay it out of pocket. Several travel rewards credit cards allow cardholders to redeem rewards points for statement credits for travel purchases.

The Capital One Venture Rewards Credit Card lets cardholders use miles to cover any travel purchases charged to the card in the last 90 days. You can use this redemption option even if you don’t have enough miles to pay for the entire purchase. If you are not already a card holder, you can stock up on these ultra-flexible miles with the card’s generous welcome bonus: 60,000 miles after spending $3,000 on purchases within 3 months from account opening.

In 2021, Capital One released the Capital One Venture X Rewards Credit Card, a premium card in the Venture lineup. With this card, you can earn 2 miles per dollar on all eligible purchases and 5 miles per dollar on flights and 10 miles per dollar on hotels and rental cars when booking via Capital One Travel.

If you have a small business, you can redeem miles earned through the Capital One Spark 2X Miles* for any travel purchases made within the last 90 days. Through the card’s earning rate of 2 miles per dollar on every purchase.

For a no annual fee travel rewards card, consider the US Bank Altitude® Connect Visa Signature® Card*. It earns 5 points per dollar on prepaid hotels and car rentals booked directly in the Altitude Rewards Center, 4 points per dollar on travel and at gas stations, 2 points per dollar at grocery stores, grocery delivery, dining and streaming services and 1 point per dollar on all other eligible purchases. And then you can redeem those points for travel purchases, merchandise, gift cards, or just cash back.

If you don’t want to have to worry about an annual fee or bonus categories, the Discover it® Miles earns 1.5 miles per dollar of every purchase. You can redeem those miles for eligible travel purchases made on your card within the past 180 days, but keep in mind that it may not be easy to swipe your Discover card when traveling abroad.

Find the Best Travel Credit Cards For 2022

Find the best travel credit card for your travel needs.

Bottom Line

Carrier-imposed surcharges—or as they’re commonly known, fuel surcharges—can really cut into the value you can get from your airline miles. However, paying a fuel surcharge is avoidable.

First, try to avoid flying on airlines that charge fuel surcharges or depart from a country or region that regulates fuel surcharges. If you can’t do either, book your award through a program that doesn’t pass along fuel surcharges. If you just can’t avoid needing to pay a fuel surcharge, you can charge the fee to a card that will let you use miles or points to offset the cost.

Leave a Comment

Businesswebsiteindex