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Yesterday, I did a redemption for a flight on American Airlines using AAdvanatge points. The flight costs about $800 when booked normally though AA or aggregators like Expedia (tried several and there was a price difference of no more than $12). After redeeming my points for the flight, I still had to pay over $260, which is close to a third of the price! Last time I got an award flight, it cost me $240 for a $500 flight, so almost half. All these were round-trips, if that makes a difference.

Is there any way to avoid or at least reduce the amount to pay when redeeming a flight using frequent-flyer points?

Would redeeming across airlines help? Like using AAdvantage points to book an another One World member. Do some type of flights (one-way, multi-city) or some origins or destinations incur fewer of these fees?

For Bonus Points: What are these charges actually? I assume airport taxes but the receipt I got does not specify a breakdown.

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    What is your itinerary? Which airline is operating your flights? – Berwyn Aug 4 '16 at 14:42
  • This blog post explains it in details: travelcodex.com/2016/03/… – Nean Der Thal Aug 4 '16 at 15:12
  • American. For itinerary, it's too late (as well as the previous redemptions which were similar, as mentioned). The question is can I booked an award for fewer fees? Hopefully, it does not have to be so specific to an exact itinerary that the answer will be useful in the future! – Itai Aug 4 '16 at 15:21
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    Certain charges depend on the itinerary and which airline is operating the flight. If you book an AA transatlantic flight that is actually operated by BA, you will pay the BA YQ charge for example. If you travel to London and back, you will pay UK APD. Would be much easier for someone to answer if you gave your intinerary and operating airlines. – Berwyn Aug 4 '16 at 16:12
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With American, you can't avoid the fees completely, it says so in their terms.

AAdvantage flight awards are subject to, and the passenger is responsible for, any applicable departure taxes, security fees, federal inspection fees, passenger facility charges and/or other taxes, fees and surcharges assessed by appropriate authorities or partner carriers. In addition, there may be applicable non-refundable charges under the AAdvantage program, such as AAdvantage award charges or upgrade award co-pays.

However, you can reduce those fees in at least two ways.

1- Book entirely on American. This avoids fuel surcharge that other partners such as BA do charge you

2- Avoid international travel. I assume, given your previous posts, you're flying out of Canada. We have expensive airport fees and this hikes the total American charges you.

  • Interesting. I'm close to the border though, so if I flew from the US to Panama for example, instead of Canada to Panama, it would be the same number of points but would that be less fees. – Itai Aug 4 '16 at 16:58
  • @Itai depends on Panama's international fees, I just know for fact Canadian ones are expensive (I live here) – blackbird Aug 4 '16 at 17:07
  • Although it sounds like it depends on fees on both ends. Is it the total? or the highest? If the former, then going US to Panama would have less fees then Canada to Panama, right? I live in Canada too but sometimes take off from the US (2 hours away) because it is sometimes cheaper for non-award tickets. – Itai Aug 4 '16 at 18:07
  • @Itai it has to be the total, whenever I look at fee breakdown it's always a sum, which makes sense as these fees aren't optional they're imposed by countries. So you're right, it would be cheaper to fly from the US in that case – blackbird Aug 4 '16 at 18:10
  • If you call American and ask, they will tell you exactly what the fees are for both itineraries. All you're going to get here is speculation. You could also search for every legal/regulatory/tax jurisdiction in involved and analyze their fee structure to see of it applies. – Johns-305 Aug 5 '16 at 14:30
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Disclaimer: I work at Flightfox

To understand how airlines calculate fees and taxes on an award ticket, first you need to understand what makes the price of a cash ticket.

Let's use a one-way AA ticket from NYC to London an example:

Source: matrix.itasoftware.com[1]

Total price of the ticket is $1,498.90 and it consists of:

  1. Basefare (Fare 1: AA H1N0O1C5 NY to LON) — $1,212.00
  2. Fuel surcharge (AA YR Surcharge) — $259
  3. Local and government taxes (Departure tax, Security Fee, Passenger Facility Charge) — $27.90

A base fare is what the airline actually charges for the ticket. In plain words, it's the money that the airline makes selling you a ticket.

A fuel surcharge was originally introduced for airlines to easily change the airfare prices in face of rapidly changing oil prices. Currently, airlines use fuel surcharges in several different ways. One of them is to charge extra money for award (miles) flights.

Taxes are paid by the airlines directly to the government or airport.

What do airlines charge for award (miles) flights?

When booking an award (miles) flight, you are never charge the base fare. What you can be charge is fuel surcharge and taxes. For example, any domestic award ticket using AA-only flights will cost you $5.60 total (September 11th Security Fee). However, a ticket on British Airways (eg. to London) will cost you several hundred dollars because the fuel surcharge will be added to the total price.

You can check the fare structure of a flight that you want to book with miles by using ITA Matrix

How to lower the amount of fees and taxes on an award (miles) ticket?

  1. Use your miles for airlines that impose no or low fuel surcharges. For AAdvantage miles, try AA or Cathay Pacific and avoid British Airways.
  2. Use miles for trips originating from countries with low taxes (eg. USA), avoid tickets from/to Great Britain ($95 in economy and $190 in business class extra tax)
  3. Don't book last minute as many airlines add late-ticketing fees (AA: $75 if booked within 21 days of departure)

When is it a good deal to book with miles vs. cash?

I recommend to use your miles when 10,000 miles AAdvantage miles save you at least $100 dollars, but preferably $150. The best way to use your miles is for business and first class flights, where 10,000 miles can save you $1,000.

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Call AA back and they will tell you all the fees involved.

Based on the amount, this sounds like an international itinerary so there's piles of Government mandated fees on both ends which they would still have to pay or are categorized as user fees which you still have to pay. The airline is just collecting and remitting it on your behalf.

You are using miles for the fare but the Governments still want their money.

You can ask if there are any waiveable fees but do not expect any.

  • How does this not answer the question? Downvote totally unwarrented. – Johns-305 Aug 4 '16 at 14:52
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    I didn't downvote, but for one you don't know for fact those are gov fees, maybe their rules specify they charge you a portion of the fare, second the question in bold isn't really addressed – blackbird Aug 4 '16 at 14:55
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    @Johns-305 he could've called AA without posting here, he posted here so in case someon actually knows what's going on would answer, not to be told to go and call AA :) that's the whole point of a Q&A site.. a question, then an answer, not a guess, not a suggestion.. – Nean Der Thal Aug 4 '16 at 15:02
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    @Johns-305 sorry mate, but that's wrong. This site is made in case someone been through the same situation before and knows the answer. So he/she share it here, then anyone else who faces the same situation will find the answer. That's the whole point of Q&A... – Nean Der Thal Aug 4 '16 at 15:08
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    Agree with @HeidelBerGensis - they've asked what the fees might be, and you've asked them to call the airline. That tells them another way to find the answer, but doesn't actually answer their question - the whole point of them asking on this site. – Mark Mayo Supports Monica Aug 4 '16 at 15:26

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