When redeeming frequent flyer points, high taxes can add hundreds of dollars to the cost of a “free” flight. These taxes typically need to be paid with real money, in addition to the points required.
Many airlines also impose their own “carrier charges”, sometimes disguised as fuel surcharges. Qantas, Singapore Airlines, Emirates and British Airways are just some of the airlines that pass high “fuel surcharges” onto their frequent flyers when redeeming points.
While paying taxes on award tickets is inevitable, there are a few tricks that can be used to drastically reduce the amount paid! The first trick is to redeem points for flights on an airline that does not impose fuel surcharges. For example, Qantas partners including American Airlines, Cathay Pacific and LATAM Airlines charge low or no fuel surcharges.
Try and avoid using BA and QF, they have some of the highest surcharges. CX out of HKG is always good and low. AA is low.
If you’re using Velocity points, Virgin Australia flights are actually the best choice as Virgin does not impose extra charges for their own flights. Very high surcharges are added, however, for Etihad flight redemptions.
But it’s not just the airlines themselves that charge high taxes. The UK government charges what it calls an Air Passenger Duty to passengers flying out of the UK. The tax can be as little as $23 for short-haul Economy flights, or as high as $250 for long-haul flights in a premium cabin! So if you’re using points to fly to Europe, another way to keep costs down is to avoid departing on a long-haul flight from the UK.
For one you want to avoid flying OUT of the UK. Flying in is OK, but the APD on flying out, specially in any kind of premium cabin will break the piggy bank (and I think they are raising them again too!).. so fine to fly into LHR, but train it across (or get a separate cheap flight) to CDG or AMS to continue on.
Apart from avoiding the UK entirely, there are other ways to avoid paying the hefty departure tax. For example, passengers transiting in the country for up to 24 hours are exempt.
One final option is to book travel originating in a country where fuel surcharges are either banned, or highly regulated. Airlines cannot legally impose high fuel surcharges if you begin your trip in one of these countries.
If you really want to bring the taxes down, you could start the trip in a country where fuel surcharge are illegal or regulated. These include Hong Kong, Philippines and Brazil.
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