My Award Taxes And Fees Are How Much?!?!

As you may (or may not) know, I also have a points consulting service, whereby we help people redeem their airline miles. I have several colleagues working with me, and they’re some of the most knowledgeable and passionate people I know in this hobby. During my dad’s round the world surprise birthday trip they offered to step in and help with some guest posts. Thanks to the positive feedback, they’re back with more. This post is from my friend Tiffany, whom you’ve heard from before.


Unlike Ben, I don’t have a “sixth sense” when it comes to pricing fuel surcharges. Nine times out of ten he can guess the taxes and fees on a given award within $15, which is a pretty cool party trick.

I do, however, have a good “general sense” of how much things should cost, particularly when dealing with an airline that doesn’t impose fuel surcharges. When you eliminate fuel surcharges, you’re mainly dealing with the government-imposed taxes, which are pretty consistent.

Beyond that, most airlines have a computer that prices award tickets. The computer validates the routing against the published rules, calculates the taxes and fees from the published fare, and totals the final price for the agent.

Barring that, airlines have a rates desk, which is typically the powerhouse of the airline when it comes to pricing. This is a powerful component of the operation, and you generally find the best and brightest agents staffing the rates desk. What they say pretty much goes, and front line agents seem to be taught to treat their word as law.

And then there’s US Airways

Bless their hearts, they don’t have computers that can auto-price routes. They don’t even seem to have computers calculating taxes and fees.

And rather than a celebrated cadre of computational wizards, their rates desk seems to be more like this:

High-Award-Fees-1

As an example, our awesome colleague Mac was recently booking an award for a client using US Airways miles. The routing was pretty straightforward on Cathay Pacific and JAL, and was something like:

Cathay Pacific Chicago to Hong Kong [Business]
DragonAir Hong Kong to Beijing [Business]
JAL Shanghai to Tokyo [Business]
JAL Tokyo to Chicago [Business]

The award was held, and when we went back to ticket the agent quoted the taxes at $531.00 per person.

Say what?

Mac: Ma’am, I’m sorry but that seems ridiculously high. Would it be possible to have your rates desk double check that before we ticket?
Agent: I can try, but these awards have taxes, you know.
**15 minutes later**
Agent: That’s correct, you have $475 worth of US taxes on the base fare.
Mac: US taxes like US Airways-imposed fees? That just seems really high.
Agent: Nope, those are government taxes.
Mac: Ah, I see. Well, let’s just leave it on hold and I’ll double-check that’s okay.

Now, even if you’re not an award guru, something should tell you that “$475 worth of US taxes” sounds a bit fishy. US Airways only levies fuel surcharges on British Airways and Iberia, and there’s no other reason why the fees would be so high.

So we called back.

Mac: Hi, I have an award I need to ticket, but I just need to double-check the taxes and fees before doing so.
Agent: Looks like $531 per person, plus $50 each as the Dividend Miles processing fee.
Mac: Hmm, that seems rather high. Would it be possible to have your rates desk double check that before we ticket?
Agent: Sure, please hold.
**90 seconds later**
Agent: They said they just told you what the taxes were.
Mac: Ah, yes. Can you please give me the breakdown just so I can pass that information on?
Agent: It’s illegal for us to divulge what each of the fees is.
Mac: Really? Very interesting.
Agent: Yes, there are lots of legal restrictions nowadays.

What the…?

The hold was about to expire, so we moved on to Plan C: ticket the award, research, and get it fixed within 24 hours.

How can you determine what the taxes should be on an award?

This isn’t an exact science, but a pretty reliable method is to simply price the fare on ITA, and do some math.

To price the outbound between Chicago and Beijing, enter the route details on the search screen:

High-Award-Fees-2

We obviously aren’t paying the base fare, and US Airways should only be levying fuel surcharges on British Airways and Iberia, so we can ignore those numbers and add up the rest of the fare breakdown:

High-Award-Fees-4

So the outbound should be ~$28.00, which isn’t bad at all.

Then we do the same thing for the return:

High-Award-Fees-5

Adding both numbers together, we should be looking at ~$91, plus the $50 Dividend Miles processing fee. That would put us in the $300 range for both tickets combined. This still isn’t exact, but gives you a ballpark of what you should expect to pay. Much, much, less than the ~$1,165 we were originally quoted.

Concrete information in hand, we called again.

How to have an award repriced

As Ben has gone over repeatedly, knowing how to talk to phone agents makes a huge difference here. You can’t just call back and insist you were overcharged and demand a refund.

I mean, you can, but I don’t think it’s going to be successful.

Mac: Hi, I’m calling because I ticketed an award earlier, and in looking over the taxes they seem really high compared to what I was expecting.
Agent: Well, some airlines have higher fees now, but let me look at the PNR.
Mac: It’s ______
Agent: Hmmmm, I know British Airways and LAN [n.b. I think she meant Iberia] levy fuel surcharges, which is more expensive, but I don’t know about these Asian airlines. Let me check though — they keep changing things on me.
Mac: Thanks, appreciate it.
**25 minutes later**
Agent: Sure enough, looks like you were overcharged. You’ll be getting $445 back to your card.
Mac: Wow! Thanks for checking on that! Did they happen to say if that was per person, or total?
Agent: Oh, probably total, but let me check.
**15 minutes later**
Agent: Thanks for holding, and looks like you’ll be getting back $475 each.
Mac: Oh my, that’s quite a difference!
Agent: Yep, good thing you called!

At the end of the day, this means our couple paid ~$215 all-in for the taxes and fees on their award. Given the math we did earlier, this is actually too low, but is a great example of how manual the process is over at US Airways.

Bottom line

This makes me so sad, because there is no way the average consumer would have known they were overpaying by nearly a thousand dollars.

None.

US Airways doesn’t go back and audit award fees as far as I know, so this couple would have happily taken their trip (and probably been thrilled with their redemption), but would have spent ~$950 more than they needed to.

So the moral of the story is to have a ballpark idea of what you should be paying on an award ticket, and to not be afraid to (kindly) push back if the amount seems ridiculously high.

What about you? Have you ever been quoted too much for award taxes and fees? How did you handle it?

Comments

  1. i recently booked a business class round trip from jfk to hong kong on korean air with transferred Ultimate Rewards points.. i paid $323 for taxes and fees. did i paid too much?
    i did not know you could negotiate the amount.

  2. It is painful hearing US Air reps fumble around with your reservation even after you spoonfed them the flight info you researched. The worst part is that the reps who have worked there for a while; their frustration with the system is obvious and they take it out on you when they lose their patience. There have been points where it felt like I had to provide them customer service instead of the other way around.

  3. “Agent: It’s illegal for us to divulge what each of the fees is.”

    ???!!!

    I admire Mac’s restraint in response.

  4. I just got an Skymiles award ticket (Using Delta site) for my sister for Budapest – Cincinnati – Budapest on Delta, simple straight forward route. paid $1750 !!!! in taxes and fees over the 220k miles. OMG.

  5. So really, this was just a commercial telling us that we should use PointsPros. 🙂

    I kid, I kid, great post, Tiffany!

    (And I’ve use PointsPros, and will vouch for you guys any day)

  6. I had a similar experience booking my first ever award redemption a few years ago with US Airway miles. I didnt really know what I was doing but I knew that $1,000 bucks in fees for two coach tickets to europe with only one stopover was way to high. I eventually just let the hold lapse and booked it again. Fortunatly the tickets were still available and the fees came down by 80%.

  7. @ steven k — That sounds like the right amount. Korean Air does levy moderate fuel surcharges on awards, and they use a computer to calculate the fees.

    We’re not really negotiating the amount, more asking the fine folks at US Airways if they’re really confident in their arithmetic.

  8. @ Pat — No kidding! Sometimes I feel like they should be paying me the Dividend Miles “processing” fee!!

  9. @ meegabroad — Well, keep in mind his primary airline is Delta, so he’s well practiced at exercising restraint 😉

  10. @ Endre — That does not sound correct. Delta does charge higher fees for originating in Europe, but that’s just ridiculous. May I ask what your routing is?

  11. @ TravelinWilly — Hahaha! If it were a commercial we’d have only needed to call once for it to be magically perfect :p

  12. Serious inquiry: How much would you charge for 3 pax if you recheck the fees I paid on my award for next summer? I think I paid too much

  13. @ Nkk — Did you book through US Airways? Have you tried pricing out the ticket through ITA like I showed up above?

  14. @ meegabroad Funny comment! @Tiffany Thank you for the comment! I called diamond desk at Delta. They sent me to someone else from first agent, and came back that it was incorrectly calculated , and now it is $600.70. Go figure.

    The route is: Budapest -(KLM)- Amsterdam – (Delta) – Newark – (Delta) – Cincinnati – (Delta) – Minneapolis – (Delta) – Amsterdam – (KLM) – Budapest

    Details – Taxes/Carrier-imposed Fees –
    Total: 600.70

    Itemized: 11.20 AY 5.00 XA 7.00 XY 5.50 YC 3.80 FE 31.60 HU 18.40 CJ 17.20 RN 5.20 VV 460.80 YR 35.00 US

    Fare Details
    BUD KL X/AMS DL X/EWR DL CVG0.00CSM625/FT231 DL X/MSP DL AMS0.00CSD1000/FD231 KL BUD0.00CSM500/FT232 NUC0.00END ROE1.00 EXEMPTX

  15. Yes I booked through US Airways. It’s one of those north asia/ europe awards so it is a little complicated. I did follow your example above but wasnt able to quite reproduce…
    Itinerary also include an intra-europe award on BA (from AMS to LHR and then LHR to MAD)
    Full itenerary here: dca-jfk-hkg-nrt-hkg-ams-lhr-mad-phl-dca (late june 2015). Any help is appreciated!

  16. Thanks for the great “social engineering” advice!

    I had almost the exact same experience with BA a couple of years ago, charging outrageous “taxes” on a AA domestic leg. They wouldn’t budge during the booking process, so I booked the ticket and called back afterwards — like you did. They provided a refund and thanked me for calling.

    If they hadn’t changed it, I could have simply cancelled the ticket since I was within the 24 hour limit.

  17. Tiffany, I am super excited to see you blogging! And I’m definitely bookmarking this for when I use up some of my US Air points!

    As an aside, it was amazing meeting you at FTU DC on Sunday afternoon. Thanks for letting us pick your brain for a bit. You were fantastic!

  18. @ Nkk — Ah, in that case I’d look up each segment separately and add all the fees together at the end. It won’t be exact, but that should give you a general range. Keep in mind you do pay fuel surcharges for flights on BA (coded as YQ or YR).

  19. @ Kris — Hah, thanks, and it was truly my pleasure! I’m excited to see how you end up using those miles!!

  20. ,,,and, on BA, those fuel dumps just keep rising. A one way US-Continental Europe itinerary we booked in “F” in 2011 cost us $280 taxes/fees per person then, would be $490 now. No wonder BA availability is so much better than anyone else’s.

  21. With hindsight, the biggest mistake of my miles and points hobby was spending $1000 out of pocket to buy 90,000 US Airways miles. I called the call center for the first time the other day, and boy, their agents AND system are worthless. Everything I’ve read about how retarded they are is true.

  22. Ha! If only you post this two month earlier!

    I had a itinerary booked in October that involves traveling on Qatar and Cathay Pacific and British Airways’ european routes and two-way 24hr transit in LHR. Was charged roughly 760 USD per person in taxes and fees. Asked for the rate desk to check and talked to a supervisor, who told me it’s 700 USD “airline imposed fees” and there’s no break down for that, and you “either pay it or you don’t fly”.

  23. A terrific, practical case study. Thank you! There are so many gotchas in booking an award. Getting what’s due to your clients must be a great satisfaction.

  24. @ Tiffany — what would you have done if US refused to fix the fees? Because US allows a hold, you don’t get an option to redeposit without a fee, right?

    On a tangential note, also had a fun experience with US agents. After I’d flown an outbound first leg, there was a minor schedule change on a return leg of a domestic round-trip award. Two agents told me that if I don’t accept the change, I’d get 1/2 miles back on top of fee reimbursement; it’s not something they allow normally, of course, but I figured perhaps it was an exception similar to refunding a nonrefundable revenue ticket when a schedule change occurs.

    Given there was a more convenient flight on another airline, I decided to take them up on their offer. Lo and behold, I got $5 back but no miles. Long story short, first two agents were wrong and not supposed to get miles back. Had to escalate by filling out an online form to get the miles back as a one-time exception.

  25. @ Ivan Y — I would have just kept calling. Someone would have fixed it eventually, they always do.

    Glad you were able to get some miles back, that’s definitely not the official policy!

  26. I’ve just been hit with an overcharge. Have one BA segment, so was expecting about $240 or $245 in YQ based on ITA (and seeing what AA would charge on the route, that’s spot on). Hit with $414. I’m guessing I’m in for some pain on this, since there should be some YQ but not as much as I was charged. Anyone have tips for dealing with that?

  27. Outbound is DCA-AA-JFK-CX-HKG-CX-KUL-MH-DPS in domestic F/international J. Inbound is HKG-CX-LHR-BA-IAD in F. I can’t come up with the exact amount of YQ they charged me based on revenue bookings, but adding in the CX YQ/YR would get close to the $414 they charged me. (And for the avoidance of doubt, I’ve reviewed the fare breakdown using Saudia to confirm that it’s $414 in YQ. Also, they did mange to avoid charging me UK APD. I had kind of hoped that was the error, as that would be easier to battle after the fact.)

  28. @ Mitch — So they’re actually not totally wrong. The roundtrip fuel surcharge on Washington to London is $828, and they simply charged you half of that. It seems you’re going off the London to Washington fuel surcharges, which is artificially low when originating in the UK due to the APD.

    So while other agents may have interpreted it differently, they’re not really technically that wrong. Charging you the fuel surcharges just for the London to Washington segment as if you were originating there wouldn’t have been correct either, since that fuel surcharge is based on having originated there.

    Realize that might not be all that helpful, but at least it hopefully helps you understand how they arrived at that number. Good luck!

  29. @lucky — That’s a totally bizarre way to calculate the surcharge, but it would fit with US Airways “logic”. The WAS-LON YQ is $414, so I’m wondering if the agent didn’t just look at that and assume that it was symmetric. A LON-WAS r/t in F has YQ of $479.60, so I don’t think that the APD argument you make is on point. (You pay APD on a round trip regardless of origin.) I’ve done some experimenting with AA’s system, and a simple IAD-LHR-IAD in F gets $828 in YQ. However, things get really weird if you do JFK-TXL on AB and return LHR-IAD on BA. Then you get $428 in YQ, which is half of the JFK-TXL YQ on BA. (JFK-LHR YQ is $828 just like IAD-LHR.) Now that even AA’s usually sane systems are doing confusing things, I really have no idea what the “right” answer is for what I should have been charged. (Although if you run the whole routing through ITA all at once, even with it knowing the US origin, it charges ~$250 in YQ.) I figure it’s worth at least one try to find a US Airways agent who agrees with my logic of “just look at the actual flights that incur YQ and go from there”.

    Thanks for your input. I’ll come back and share the result after I find time to give it a call or three.

  30. @ Mitch — Let me know how it goes! Totally agree what they did ultimately wasn’t necessarily right, but keep in mind what they’re doing with calculating fuel surcharges just on BA is sort of unprecedented. There simply isn’t a correct way to calculate fuel surcharges on one airline as part of a continuous journey, since it’s all dependent on the origin and destination.

    Good luck and let me know how it goes!

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