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Understanding Airline Surcharges

This post is also available in: FR

Several years ago, airlines had to face the explosion of fuel costs. Many of them decided to add a “fuel surcharge” line to their tickets.

Then, with a return to “normal” oil prices, this surcharge was renamed “carrier surcharge”.

When you pay for your flight, this surcharge is “invisible” since it is included in the final price.

But when you use miles, this carrier surcharge appears as a surcharge to pay, just like the various airport taxes.

So let’s test it out on a classic ticket: Montreal-Paris in economy class.

Carrier surcharge: Montreal-Paris with Aeroplan

Many Star Alliance airlines serve Paris from Canada.

There is of course Air Canada which has the advantage of offering a direct flight, but there are other companies such as United (via the United States), Swiss (via Zurich), Turkish (via Istanbul) or Lufthansa (via Munich / Frankfurt).

When you do your search on Aeroplan, this is what it looks like:

go ac swiss united
The outward journey: Montreal-Paris on February 6, 2016
back to ac swiss united
Return: Paris-Montreal February 16, 2016

Aeroplan will offer the shortest flight first, usually Air Canada. And it’s usually the one that anyone would prefer at the time of booking.

Let’s see 2 cases.

Montreal-Paris on Air Canada with your Aeroplan miles

By choosing the first option proposed by Aeroplan, we are entitled to a direct flight on Air Canada.

round trip ACPNG

As you can see, it will cost you 60,000 miles and $593.85 in “taxes, fees & surcharges”.

If you click on the details of these “taxes, fees & surcharges”, this is what appears:

AC details

The largest portion of the surcharges is represented by the“Carrier Surcharge” line:
456$
.

By looking at a specialized site – ITA Matrix – to have the details of the fare, we see that it is indeed a surcharge charged by Air Canada, whether to passengers paying their ticket, or to those using Aeroplan miles.

This is not a tax charged by Aeroplan. but by Air Canada.

details AC ITA

Montreal-Paris on Swiss with your Aeroplan Miles

Now let’s choose the second option offered by Aeroplan: with Swiss.

return trip swiss

The number of miles required is the same: 60,000 Aeroplan miles. But as you can see, the “taxes, fees & surcharges” line is much lower than in our first example with Air Canada: $164.55.

If you look at this line in detail, you will see that there isno carrier overload.

details SWISS

However, in the public tariff available on ITA Matrix, there are 2 surcharges that appear. However, these apply ONLY to those who pay for their tickets in cash and not to those who use their Aeroplan Miles.

details swiss ITA

Companies that do not apply a carrier surcharge

The principle is the same for British Airways Executive Club miles for Oneworld companies, or Flying Blue miles for Skyteam companies.

It is therefore necessary to know the list of airlines that do not apply any surcharges on reservations made with your miles!

You’ll have to make some concessions in terms of matches, but it’s worth it for the hundreds of dollars saved!

What is the future of carrier overload?

Airlines are increasingly being criticized for these surcharges. Some countries have even taken action by regulating them. This has been the case in Brazil for several years, where any type of surcharge on tickets paid with miles has been prohibited, and since the beginning of the year Japan has started to limit them.

In any case, we should not expect a significant reduction in the price of air tickets paid in cash following the eventual disappearance of these surcharges: this cost will be transferred to the base price of the ticket, which will mechanically increase!

We can only hope that tickets booked with miles will be less expensive in the future!

This post is also available in: FR

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Jean-Maximilien
Jean-Maximilien is an expert in Canada and France about Loyalty programs, Credit cards and Travel. He is the Founding President of Milesopedia.

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