It has been a few big weeks for Velocity, devaluing its transfer rate to KrisFlyer (bad news) and strengthening its international lounge network (good news). Let’s throw another piece of (bad) news in there: they are increasing the cash component of a lot of award bookings. Read on to get the details.
In this guide
Say you want to fly to the US. Did you know that you’ll pay less in fuel surcharges if you use your Qantas Points on an American Airlines flight rather than a Qantas flight?
This is the second guide in a two-part series looking at how to minimise the taxes, fees and fuel surcharges on flight bookings, regardless of whether they are included in a paid ticket or a points redemption.
There are two key tactics to minimising these fees:
- Choosing where you fly to or from (our first guide) – government- and airport-imposed fees
- Airlines and frequent flyer programs to use to reduce costs (this guide) – airline- and frequent flyer program-imposed fees
Air New Zealand Airpoints: poor redemption rates, but [reasonably] transparent fees
There are no extra charges for Airpoints redemptions made for:
- Air New Zealand flights
- United Airlines operated flights between Auckland and San Francisco
- Air China operated flights between Auckland and Beijing
- Cathay Pacific operated flights between Auckland or Christchurch and Hong Kong
- Qantas operated domestic Australia flights purchased in conjunction with an Air New Zealand international flight
On these flights, you will just pay the tax and fuel surcharge component of the ordinary fare price. Taxes on domestic flights can be paid for with Airpoints Dollars.
Partner award redemptions will incur applicable taxes, levies and surcharges on top of the Airpoints Dollars redemption amount. These rates are not so transparent, and can only be found out by calling Air New Zealand.
Velocity Frequent Flyer: fees jumping in 2019
Among of all the easy-to-earn frequent flyer programs in Australia and New Zealand – Airpoints, Velocity, Qantas Frequent Flyer, KrisFlyer, and Asia Miles – Velocity has lower taxes and fees attached to its bookings—and it will stay that way.
However, for bookings made on or after 1 January 2019, on all Virgin Australia flights as well Delta Air Lines flights between Sydney and Los Angeles, there will be ugly ‘Carrier Charges’ added at the following rates:
As you can see, if you are redeeming your Velocity Points for a flight Trans-Tasman or within Australia, there is not going to be much of a difference. However, if you are flying to a Pacific Island or Hong Kong, then the fees creep up, whilst a one-way trip from Australia to LA in Business Class will set you back an extra $230 on top of the current taxes and fees of ~$115. What impact will that have on the latter route? Well, Virgin Australia typically releases very few Business and Premium Economy Class seats on its flights to LA—you are most likely to get them within a week of departure—so the highest charges will affect a very small percentage of Velocity members.
My advice is to make your bookings for 2019 by the end of the year to avoid these fees. If you have a current booking and make a change to it next year, I would guess that the Carrier Charge would be added during the change process, so try to lock in your plans now if you can.
Is this the end of the world for Velocity? No, because it will still have lower taxes and fees compared to most flights on Qantas and some of its partners, however, it does erode some of the value of the program.
Note that using Velocity Points for redemptions on Etihad already attracts a hefty Etihad Airways Reward Seat Carrier Charge, whilst fuel surcharges tend to be quite reasonable on Singapore Airlines, Hawaiian Airlines and Delta (other than Sydney – LA flights).
And you’ll find that fuel surcharges on infant fares are non-existent.
If you have access to Etihad Guest miles, then using them for Virgin Australia travel can represent great value (detailed later in this guide).
Qantas Frequent Flyer: high surcharges except for redemptions on American Airlines and Japan Airlines
One of the biggest annoyances for most people when using Qantas Points are the fuel surcharges they slug you with when redeeming points. For Economy flights, these can often be a deal breaker for using points when fares are cheap.
Qantas passes on fuel surcharges with most of their frequent flyer partners.
However, if you are willing to look away from Qantas for your flights to the US—and that might be a tough ask—you can save a bunch of money by redeeming with American Airlines. American Airlines is one for which only taxes and fees are imposed, not fuel surcharges, making the co-payment when using points much lower.
American Airlines flights are really easy to book with your points on the Qantas website, plus you’ll avoid the fuel surcharges added onto a Qantas flight on the same route
As with Velocity, Qantas does not add fuel surcharges to infant fares.
In addition, using Qantas Points for redemptions on Cathay Pacific and Japan Airlines will result in reasonable fuel surcharges compared to other partners like British Airways and Qatar Airways.
We are in part lucky in New Zealand, as taxes are considerably lower for award flights booked from local airports than for award flights booked from Australian airports. This does help to offset the fuel surcharges that are passed on.
Cathay Pacific Asia Miles: save money with certain partners
Cathay Pacific’s frequent flyer program used to be one of our favourites for lower-than-average redemption rates, however, that is no longer the case, particular with return award bookings now costing the same as two one-way bookings.
However, the following airlines attract no/low fuel surcharges when using Asia Miles:
- Aer Lingus
- American Airlines (except flights to/from Europe)
Singapore Airlines KrisFlyer: no fuel surcharges on Singapore Airlines, SilkAir or United flights
You can fly Suites Class and not have to fork out much cash on top of your points redemption
Singapore Airlines’ frequent flyer program used to be notorious for adding high fuel surcharges to award tickets but that is no longer the case for the three airlines mentioned above.
Etihad Guest: low surcharges on domestic Virgin Australia flights but phone to book
Redeeming your Etihad Guest Miles for travel on Virgin Australia is often a low fuel surcharge option for domestic flights within Australia but note that it is not straightforward, requiring a phone call and a 14-day booking lead time.
American Airlines AAdvantage, United MileagePlus, Delta SkyMiles & Avianca LifeMiles: US airlines lead the pack in low fuel surcharges
The three US legacy carriers plus Avianca’s LifeMiles program all avoid adding on fuel surcharges in most cases, with the notable exception of AAdvantage subjecting redemptions on British Airways and Iberia to this extra cost.
The most common way for travellers from our region to get their hands on points in these programs are through buying miles promotions:
British Airways Avios: stay away from BA and direct your attention to its partners
BA’s frequent flyer program is famed for adding high fuel surcharges, especially to its own flights, so the best value is to be found on its partner airlines.
Here are some of our tips for booking the best-value award flights with your Avios points:
- Focus on domestic redemptions on partner airlines: within Australia on Qantas, the US on American Airlines, Japan on Japan Airlines, and Europe on airberlin and Aer Lingus
Flying domestically within Japan can be surprisingly expensive if you buy the ticket outright, but if you use your Avios, you’ll enjoy very low taxes, fees and fuel surcharges
- If you do want to make a redemption on an Iberia-operated flight, your fuel surcharges will be lower if you redeem your Avios through Iberia Plus rather than British Airways. You can transfer your Avios between British Airways and Iberia at 1:1, however, do note that in order to transfer your Avios to an Iberia Plus account, that account needs to be open for at least three months and have previous points activity
How can I calculate the fuel surcharges on a ticket?
Fuel surcharges are shown as a co-payment when you are searching for flights as a points redemption on a frequent flyer program website like Velocity or Qantas Frequent Flyer.
You can either look there for the exact amount of fuel surcharges added, or you can get a pretty accurate estimate of these surcharges by searching on Google’s ITA Matrix.
For example, when I searched for a Business Class ticket from Auckland to Shanghai on Air New Zealand, I got the following cost breakdown:
The first line is the base airfare. You’ll avoid this cost if you are redeeming points for an award ticket.
The next three lines are taxes and fees charged by the New Zealand Government and airport authorities.
And the last line is fuel surcharges (using acronyms YQ and/or YR), which come from the airline itself.
Many of us have been in the situation where we have found an available award seat that suits us ideally but are slugged with high fuel surcharges at the end of the booking process.
Knowing that you can use your points in a particular frequent flyer program for travel with partner airlines can often open up better-value redemptions.
How have or do you reduce your surcharges when redeeming award seats? This is a dynamic guide, so please comment below and we can add it in!
Featured image courtesy of Flickr. All other images courtesy of respective frequent flyer programs.