Let me put it this way: If they can get away with it, American Airlines will certainly deal with a fuel surcharge in order to grant the redemption. But it probably won’t be like British Airways and Emirates.
Faced with high oil prices, will US carriers add fuel surcharges for prize redemptions?
Even as oil falls below $100/barrel, US carriers are warning that higher fuel prices will affect ticket prices in the coming weeks. Delta CEO Ed Bastian told the Financial Times that there is “no question” that higher fuel prices will drive up ticket prices. Importantly, he said Delta will add fuel surcharges to international flights “as market conditions allow.” United and American have also linked higher ticket prices to rising fuel prices.
With fuel prices rising to several-year highs, we have seen Emirates significantly increase fuel surcharges on prize redemptions in recent times. For example, last month the tax/fee on a one-way business class award from Los Angeles to Dubai was $181.20. Today, the same prize will cost you $611.20.
While Emirates’ increased fees are not proportional to the increase in fuel prices, it does mark a trend in which I expect we will see higher out-of-pocket fees on Air France, British Airways, KLM, Virgin Atlantic and Turkey. will see. Airlines.
As far as US carriers are concerned, I can’t imagine that they would impose a one-time fuel surcharge (officially called carrier-imposed surcharge) on award travel. Consumers have become accustomed to paying benefits and government taxes and adding a fuel surcharge to rewards tickets would spark a massive revolt against the old airlines’ biggest customers: the credit card companies.
Take a look at the fuel surcharge on a San Francisco to London United ticket in June:
While $1,400 allows YQ United to offer a more attractive base fare, adding such a fee to ticketing (as Lufthansa Group carriers already do) is unacceptable to most travelers.
But that doesn’t mean American airlines won’t pass on fuel costs to consumers. Instead, we will see that in the form of higher profit prices. I’m frankly surprised at how high rewards have been priced lately. Sticking to United, prizes that used to max out at 155K and are available reality are now running 395K one-way. this is madness.
Watch for this trend to continue. Fees will be limited to government taxes, but mileage prices will continue to skyrocket.
In that sense, especially with more flexible change policies, if you see a place for summer or autumn travel, grab it right away—you can always improve it later.
I don’t expect US carriers to add a cash fuel surcharge for redemption. However, I expect mileage prices to continue to rise for awards on American, Delta and United…we’re already seeing this and it will only continue. In practice, it’s a “six of one, half a dozen of the other” approach to rewards travel. Some will be happy to pay a lower fee and more miles while others wish they could pay more cash to conserve their miles. Either way, expect the price of prize tickets to rise. And if you’re considering a reward using your own programs on carriers like British Airways or Emirates or Lufthansa, book now before the surcharge increases again.
Image: American Airlines