Why is there such a big surcharge to book my 'free' flight with points?
Some airlines impose hefty fees, others don't
Tony Mecia is a business journalist who writes for a number of trade and general-interest publications. Every week, he answers readers’ questions about credit card rewards programs in his “Cashing In” column.
I want to use my American Airlines points to book a flight to London, but why are there so many fees?
American Airlines’ partner airline, British Airways, imposes larger surcharges on international flights than other major carriers. To save some money, make sure you book an American flight through American Airlines’ website, instead of British Airways’ where the fees are steeper.
Dear Cashing In,
I got a new credit card that gave me a bunch of American Airlines frequent flyer miles. Now I want to use them to fly to London. But when I go to get them, a lot of times, it includes hundreds of dollars in fees. That makes it seem like not such a good deal. Is there anything I can do to avoid those fees? – William
Airlines like to advertise their frequent flyer programs as giving “free” tickets to customers who accumulate enough miles. But oftentimes, that “free” ticket winds up being not so free after all.
First, that ticket is never actually free. You are always incurring some cost for it. If you accumulated a lot of miles from a credit card, then you have probably paid an annual fee and also have some spending on the card that earned you the miles. If you accumulated the miles from flying, that’s because you paid for tickets.
Charges tacked on to award tickets
Also, there are always charges associated with the award ticket. In the U.S., airlines cover the cost of the fare when you pay with miles. But you are still responsible for federal security charges ($5.60 each way) and perhaps airport fees. Those wind up being minimal, but they’re still not free.
Things get complicated when you start booking international award flights. A little more than 10 years ago, airlines started adding fuel surcharges to offset the rising cost of fuel. Oil prices subsequently fell – but the airlines never dropped the charges. They did change the name of the fees to “carrier-imposed surcharge” or something similarly vague. Foreign airlines are especially aggressive about charging the fees.
Certain airlines charge more
These fees can be steep: hundreds of dollars, in many cases. And they can apply even when you use frequent flyer miles from U.S. airlines. For instance, if you wanted to fly in October from Philadelphia to London using American frequent flyer miles, one option is to fly on partner British Airways at a round-trip cost of 60,000 miles and $529.51. Not a great deal.
By comparison, if you used those miles on an American flight between the same cities, it costs 60,000 miles and $188.41.
The key is understanding when those fees apply and working to avoid them. The most common times you’ll encounter a steep surcharge are:
American miles on British Airways or Iberia
Delta: Using Delta miles on a handful of minor partners (Aeroflot, China Eastern, etc.)
British Airways: Using British Airways miles (Avios) on British Airways flights
That means that you are in the clear most of the time. United does not impose these surcharges, and they are rare on Delta.
See Related: Beware change fees with award flights
Tip: United does not impose surcharges and they are rare on Delta.
If flying American, make sure you are on American and not British Airways or Iberia. There are other places you might encounter these big charges, mostly with foreign airlines. They are much less reticent to pass those charges along. Of course, these fees negate the value of award tickets.
With oil prices rising again, it will be interesting to see if airlines revisit these policies and make these charges more widespread. If so, the idea that a frequent flyer ticket is “free” will become even more incorrect.
See related: Airline credit cards
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