Aeroplan begins imposing fuel surcharges without advance notice on Star Alliance awards!

Aeroplan, Air Canada’s frequent flyer program, has always been a bit illogical with some of their policies. One of them has been that they imposed fuel surcharges on award tickets for travel on Air Canada, while they didn’t impose fuel surcharges on award tickets for travel on Star Alliance partner airlines.

If you usually redeem miles with US airlines you’re probably used to only paying reasonable taxes on award tickets, while if you’ve redeemed miles of a foreign loyalty program (British Airways, Lufthansa, ANA, etc.), you’ve probably noticed that a longhaul flight can cost you $500+ in fuel surcharges/taxes.

I never understood why Aeroplan imposed fuel surcharges on Air Canada but not on Star Alliance partners, but that has been their policies for years.

Well, with absolutely no advance notice, they’ve started imposing fuel surcharges for partner redemptions, including on ANA, Asiana, Lufthansa, and Thai. So far they’re not charging them on Singapore, Swiss, and United, though that may very well change too.

Just how much will an award ticket cost you now? As an example, a roundtrip New York to Frankfurt business class award ticket will now cost you an additional $560 in fuel surcharges. And that’s just a simple roundtrip ticket from the east coast of the US to Europe.

The sad thing is that up until this year, Aeroplan literally had the best mileage redemption opportunities out there. I had taken some amazing round-the-world trips thanks to them, like this one to Istanbul and Hong Kong and this one to Singapore and Seoul.

Then back in July they literally gutted their award chart, raising the cost of many of the most popular redemptions by over 50%. Then last month they started no longer allowing one to book into domestic first class when on an international business class award ticket. And now there’s this…

Aeroplan literally went from being the best loyalty program for award redemptions to one of the worst, and it’s all in a period of five months. I understand their old award chart with low redemption costs, generous routing rules, and no fuel surcharges was unsustainable, but to make three major changes in a single year (two of them without any advance notice) is truly classless.

It’s amazing how badly those with American Express Membership Rewards points have gotten screwed this year. First three massive Aeroplan devaluations. Then Continental was removed as a transfer partner as of September 30. And now in a week British Airways is massively devaluing their award chart for US based flyers.

What does this all translate to? There’s no way to redeem Membership Rewards points for travel on Star Alliance without paying fuel surcharges (Aeroplan and ANA both impose fuel surcharges). There’s no way to redeem miles at a reasonable rate for travel on OneWorld anymore (British Airways is devaluing their award chart). So that leaves transfers to Delta SkyPesos. Exactly what most people recommend not using your miles.

If American Express Membership Rewards wants to remain even a remotely decent loyalty program, they better get working fast, negotiating with Alaska, American, and/or US Airways.

I highly recommend tweeting Aeroplan to express your displeasure with the changes and also tweeting American Express to let them know how much less valuable this makes Membership Rewards points.

Day by day the value of the Chase Sapphire Preferred card increases, which is what I’m switching just about all of my spend to.

(Tip of the hat to Gary)

Comments

  1. lucky says

    @ JamesORD — Only mildly so. You can still transfer SPG points to US Airways. While they do block award space, it’s still a fuel surcharge-less program as of now with reasonable redemption rates.

  2. eponymous coward says

    I’m not convinced US is competent enough with their IT and agent training to block award space effectively. I just called them today to change FRA-YYZ-ORD-SEA segments into FRA-SEA (thanks to flight time changes, this was a freebie, no $150 fee), had to be transferred to “the reissue desk”, AND got put on hold for 15 minutes while my taxes were recalculated… and they went UP $25 (while dropping two segments, and entering a country) because apparently US botched them the first time. It’s night and day difference with working with a US agent on an award and CO/AS agent.

  3. eponymous coward says

    I’ll add that the US agents are pleasant and every now and then I get one who knows what they are doing, and you can’t knock the fact that US will do things like allow a HKG-FRA routing through BKK, but sometimes… oy.

  4. lucky says

    @ eponymous coward — Hong Kong to Frankfurt routing via Bangkok? That’s nothing! :D

    Try a New York to Buenos Aires routing via Frankfurt, or Tokyo to Bangkok routing via Munich. After all, Buenos Aires is in Spain and Munich is in China!

  5. Brian says

    Good going AC! You have now rendered your miles program completely worthless. I hope American carriers don’t follow suit one day. That would destroy most benefits of mileage programs as we know it. If this keeps up, I might have to actually sign up for a travelocity card.

  6. Carl says

    That is why i am still pleased with the UA Select Visa, which gives 3 points for UA.com purchases and 2 points for gas/groceries. I have no problem with UA. While everyone hypes the Amex PRG, I just feel MR has been totally gutted in the past year.

  7. eponymous coward says

    I admit it’s not all that impressive, Lucky, compared to the exploits you detail so well here. It’s in piddly business class to boot.

    Though I suppose I should say it’s a Seattle to Hong Kong routing, with the return via Bangkok and Frankfurt….

  8. Levi Flight says

    I was going to buy some UA accelerator miles but will hold off. Don’t want to be caught with a bait and switch if this kind of immoral behavior spreads.

  9. Scott says

    My problem with this and I think it could lead to a suit if it happened within the US is that it’s a cost of doing business.

    It would be equivalent to hotels charging $10 for the room PLUS housekeeping charges $55, electricity surcharge $8, water surcharge $4, concierge charge $20, check-in fee $50 for a total hotel price of $147, but if you use your points for the free night you still pay $137 for the surcharges.

    It’s an expense against income, what’s next, pilot charge, flight attendant charge? It’s a joke!

  10. Dan says

    Does anyone know if changing an existing mini-RTW itinerary booked at the old rates would incur new fuel surcharges?

  11. says

    I booked an Aeroplan ticket last night on LH/OS (transatlantic C) online and was not charged a fuel surcharge.

    Germany Airport Security Charge

    $8.90

    Germany International Passenger Service Charge

    $26.00

    U.S. International Transportation Tax

    $32.60

    U.S. Passenger Safety Fee

    $2.50

    U.S Passenger Facility Charge

    $4.50

    U.S Agriculture Fee

    $5.00

    U.S.A Immigration User Fee

    $7.00

    U.S. Customs User Fee

    $5.50

    Austria Passenger Service Charge

    $23.30

    Italy International/Domestic Embarkation Tax

    $9.50

    Italy Security Charge

    $3.80

    Italy Security Bag Charge

    $1.90

    Italy Council City Tax

    $6.20

    Italy Passenger Service Charge

    $1.10

    Total airport taxes, fees and surcharges per passenger

    $137.80

    Total passengers

    1

    Total airport taxes, fees and surcharges per passenger type

    $137.80

  12. says

    Yikes. Ouch. Amex Membership Reward points to SkyPesos? But I’m allergic to SkyPesos. All these changes are sure keeping me on my toes. I long for the good ol’ days.

  13. says

    If high fuel surcharges and massive devaluations spread to other carriers and programs it will mean the effective end of frequent flyer programs. Add the massive points bonuses being offered by many credit cards as well as the increasing difficulty in redeeming awards and it’s beginning to look like the last days of Green Stamps.

  14. lucky says

    @ Ann — The Starwood American Express is still good, though on the mileage transfer front the main challenge with the card is that points can take 1-2 weeks to transfer, and there’s no way to hold award availability for that long. So the card isn’t really a viable alternative to Membership Rewards, which allowed instant transfers.

    Furthermore, the Chase Sapphire Preferred card accrues two points per dollar on dining and travel, has no foreign transaction fees, and accrues a 7% annual points dividend. Most importantly their points are transferable to Continental/United, which is quickly becoming the only worthwhile loyalty program in the industry.

  15. Dan says

    @ Lucky — what’s wrong with AA? I’m sitting on a decent stash, and I don’t have too many concerns about them yet.

    I borrowed 15k MR points to top off for my CX F award via BA — I’m going to use it to pay off my “debt” and then when my annual fee comes up, I’m going to cancel the card. It’s just not worth $175.

    I’m going to hold on to my SPG AmEx and split my spend between that and my Sapphire card. I’m actually into SPG hotel stays (and Hyatt too) so both programs have appeal.

  16. lucky says

    @ Dan — I don’t think American miles are anywhere near as valuable as United miles. American imposes fuel surcharges for British Airways redemptions, which is the only reasonable way to redeem miles for a premium cabin award to Europe. Sure there’s Air Berlin with a crappy business class product or Iberia/Finnair which have next to no award availability, but the lack of options to Europe make American miles (relatively) unattractive, in my opinion.

    Further United still allows stopovers on awards (not to mention more creative routings), while American doesn’t.

    So nothing wrong with American miles, but I just think United miles give you so many more options.

  17. Chas says

    Lucky- interested to hear what you mean by “almost all” of your spend moving to Chase SP. Guessing you plan on still using your PRG for 3x airfare and 2x groceries, but I wonder: are those even worth it at this point? Especially given that airfare is only a 50% premium to the SP earning ratio- I’m not sure if that outweighs the limited utility of MR points….

  18. Todd says

    As a Canadian, this sucks twice as bad because not only have we got hit with the *A surcharge, but we really have no viable alternative to collect points on anything other than Amex simply because Chase cards (at least the Sapphire Preferred) is only available to Americans.

    I have hundreds of thousands of MR points sitting in my Amex account and now, I really have no decent airline option to transfer them to.

    I can only hope Amex negotiates another relationship and soon.

  19. Jerry Hung says

    I just hope AMEX has bonus MR promotions more often now
    I *just* signed up for AMEX Platinum ($399/fee) for its 50K bonus MR last month, and now this..

    Sigh..at least now we don’t have to avoid choosing AC flights because we get ding’ed either way

  20. Dan says

    @ lucky – I disagree with your statement that “Most importantly their points are transferable to Continental/United, which is quickly becoming the only worthwhile loyalty program in the industry.”

    Let me remind you that Continental/United completely gutted its mid-level elite tier flying bonus to 50% bonus miles while AA continues to give 100% bonus miles to its mid-level elite tier (Platinum).

  21. lucky says

    @ Dan — You’re completely right, I’m sorry. I was referring solely to award redemptions and should have clarified that.

  22. DB says

    @lucky, I’m actually glad they have done this. It will get some of the free-loading leeches that use the plan for nothing even remotely related to loyalty out of it (looking at you and your mooching cohorts).

    While I’m not happy about needing more miles and having to pay fuel surcharges for my reward redemptions, maybe…just maybe…it’s going to allow AC to influence and return the program to a focus on frequent fliers of AC. Until then, don’t let the door hit your ass on the way out.

    Signed,

    An SE with 132 AC *paid* AC segments already this year.

  23. Dan says

    @ Lucky — (FYI, there’s 2 different Dans posting). I won’t argue that AA/BA miles are a crappy way to get to Europe, but IMHO, that’s really not much of an aspirational award. 7-8 hours in coach isn’t *that* bad, and likewise, 7-8 hours up front isn’t *that* good, because, well, it’s only 7-8 hours. To me, the fun is sitting a premium cabin for 10+ hours, where you can live like a king on your own schedule.

    AA is really starting to step up their offerings in the Middle East/India/Asia. They’ve added EY and IT recently, MH is expected to join 1W next year, and don’t forget CX and JL are current 1W partners.

    So, if Middle East/India/Asia is your thing, I think AA is still a worthwhile program.

  24. Todd says

    @DB Come down off your high-horse, sir. I would hazard to guess that your employer pays for your ass to be in that plane seat, it doesn’t come out of your own pocket, yet you reap the rewards of FF travel and your oh-so coveted SE status.

    Were it not for a corporate travel policy, would you still be so “loyal”?

  25. DB says

    @todd Considering I am my employer, that I have full decision making power on how to spend on tickets, then you would be wrong sir. I make the decision on which airline I fly and which fare class I buy. You are right that I reap the rewards, but I am also the one who chooses exactly where to place my loyalty.

  26. lucky says

    @ Chas — Just made a separate blog post about this, but as of yesterday I made the “radical” change of switching my airfare spend from the Premier Rewards Gold card to the Chase Sapphire Preferred card. I value 2.14 Ultimate Rewards points more then 3.0 Membership Rewards points. So all travel and dining is going on that card, and then I’m alternating the other spend between Chase Sapphire and Starwood Preferred Guest, which is still very useful. I’m also trying to meet the minimum spend on my American Express Business Gold card, which is where the rest of my spend is going.

  27. lucky says

    @ DB — I think you’re looking at it the wrong way. Aeroplan isn’t a loyalty program but rather a profit center. They couldn’t care less how much you flew on Air Canada, because they’re not reaping the “rewards” of your flying, other than issuing you points. In other words, whether you book discounted coach fares and upgrade or full fare tickets benefits Air Canada and not Aeroplan.

    Who do you think is more beneficial to Aeroplan, someone that flies 132 paid segments a year on Air Canada, or someone that has 500,000 points sitting in an Aeroplan account that they transferred from Membership Rewards?

  28. lucky says

    @ Dan — I totally agree that American is “stepping up their game” but their award rules still leave me very frustrated. For example, you’re not allowed a stopover on a one partner award, while United still allows them. Further, their routing rules are ridiculous. For example, if you want to fly from San Francisco to Delhi you have to go via Europe and not Asia, even though Asia is more direct (not to mention has a ton more award space).

    And in terms of “aspirational” awards (meaning award redemptions that are true pieces of art in and of themselves), I still think Star Alliance has so many more options allowing you to go from the US to Asia via Europe with a stopover, giving you four longhaul first class flights for the price of two. So OneWorld is definitely improving and has a lot of new options, but I can only get excited about Cathay Pacific first class so often…

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