There’s no doubt about it – travel’s not cheap. And one of the leading ways of cutting the costs is by using travel rewards cards. But especially for those of us in high-travel-tax places like Canada and Britain, using travel miles to book a trip has become a tough way to go. The culprit: sky-high air taxes and fees.
These days, the extra charges on air fares can easily be more than the fare itself — in some cases a lot more. And the problem is especially bad on fares to Europe.
I can prove that: last year after building my points for years on Canada’s Air Miles program, I planned to use them to fly to Vienna and then Rome for a Mediterranean cruise. But when I entered the itinerary into the Air Miles system, I found my “free” ticket was going to cost me $650 in air taxes and fees. Ouch!
Using a travel agent, I ended up booking the same flights, including layovers in Vienna and Brussels, for about $950. All those Air Miles I’d saved up for years would have saved me just $300 — about half what I’d figured.
I’m not alone. In some cases the bite can be much worse, especially if you travel business class. Other Canadians have reported spending more than $1,000 on a reward ticket to Europe. Some reward.
What are these air taxes and fees? There’s a dizzying list, including the fuel surcharge, navigation service fee, security fee, insurance fee, foreign taxes, airport improvement fees, and something called a “peak travel premium”. I guess that means they add a few bucks when things get busy, just because they can.
You can’t avoid paying taxes and fees if you fly. But there are ways of getting better value for all these points and air miles you’ve been saving up. Here are a few.
Pick your spots
There are some destinations that don’t impose quite as much in the way of fees as the worst offenders. If you’re just looking to get away, browse your plan’s website for different destinations to see how the surcharges vary. As well, if you’re able to fly from a U.S. airport instead of from Canada, you can save a bundle.
Book big-ticket fares
It can be worth paying the air taxes and fees if you’re escaping an outrageously high airfare. Example: this winter a one-week flight to Puerto Vallarta cost about $500 in mid-season – but I wanted a two-week flight, and those cost a breathtaking $900. I used Air Miles, paid $240 in fees, and got my two-week flight without shelling out big money. (Not the best itinerary, but that’s another story.)
Change your airline
The Points Canada website advises that Canadians can save dollars by choosing flights on airlines served by their rewards plans that have low or no fuel surcharges. The list includes United Airlines, Air China, Brussels Airlines, Singapore Airlines and Swiss Airlines.
Enhance your trip
Even if an air flight is a bad deal, your rewards card likely offers travel services other than air tickets. For example, you may be able to use points to get a seat upgrade, duty-free shopping, access to an airport lounge or parking at the airport — all worthwhile. If you’re not going too far, you might even be able to get a rental car, train or bus tickets and avoid the flight altogether.
Use a “travel anywhere” card
Another tip from Points Canada: while your rewards plan won’t let you use points to pay the air taxes and fees, you can still pay with points by using a specific type of credit card. These “travel anywhere” cards include the American Express Gold Rewards and Platinum cards, the Diners Club Rewards MasterCard, and the Capital One Aspire Travel cards. You book your “free” ticket with your rewards plan and pay the extra fees with the “travel anywhere” card; once you receive your credit card bill, go online and pay for the fees with points you’ve earned on that card.
Get some stuff
If you’ve given up on flying with points, most reward plans offer merchandise rewards – everything from cameras and electronics to golf clubs and lawn furniture, as well as things like gift cards, iTunes credits and e-books. Air Miles even offers a Bank of Montreal investment certificate. In dollar terms these rewards may not match the value of an air ticket for the points used, but they also don’t come loaded with extra fees.
Take a timeout
One of the other things the rewards plans offer is short, one- or two-day getaways to a lodge, spa or theme park, perhaps within driving distance of your place. There’s no airline fees to pay, and these can be a refreshing break, especially if you have a busy schedule.
Give them to charity
If you’ve got a lot of miles or points and none of this sounds inviting, you can always give them to charity. Many rewards plans allow a direct transfer to a list of selected charities, which use the points for their work. This is a great option if your points are in danger of expiring (it’s a good idea to check if you don’t use the plan much). Another option is to buy carbon offsets to make up for some of the environmental damage we do by flying all over the world.
It’s time we took a hard look at these air taxes and fees. Are they all really necessary? And more importantly, shouldn’t a lot of them be included in the actual fare, instead of shuffled into the small print so the rewards plans can pass them on to you? Some reports claim the fuel surcharge is included in the base fare when you buy directly from the airline but added to the fees and taxes when you buy the flight with points. How convenient.
Here in Canada, at least one credit card has advertised that it doesn’t impose air taxes and fees. Hopefully, more will follow their lead. And hopefully governments will cut some of the taxes, and put limits on what air taxes and fees the airlines and rewards cards can tack onto their fares. It would make those security line-ups a little more bearable …