Your Ticket’s “Point Of Origin” Could Cost You Hundreds

14 November, 202214 November, 2022 Matt Graham

Japan Airlines planes at Narita Airport, Tokyo — The country where you book your ticket from can make a big difference to the price. Photo: Afif Ramdhasuma.

When redeeming frequent flyer points, carrier charges (also known as fuel surcharges) can add hundreds or even thousands of dollars to the cost of reward flights. But not all airlines charge them, and for those that do, the amount of carrier charges paid can vary significantly depending on where you start your trip.

There are two components of the “taxes & charges” co-payment when redeeming points for a flight. The taxes are made up of legitimate third-party fees and taxes which are charged by governments and airports. These apply to all airfares sold and do not go to the airline. But the “carrier charge” component goes directly to the operating airline and is essentially just an arbitrary fee.

You can’t generally avoid paying third-party taxes (except on Japanese domestic flights!), but you can avoid paying airline-imposed carrier charges by redeeming points to fly with airlines that don’t have them. For example, if you use Qantas points to fly with certain partner airlines such as Fiji Airways, Alaska Airlines or LATAM Airlines, there are no carrier charges payable.

The airline that you choose to fly is not the only thing that determines how much you’ll pay. Your ticket’s “Point Of Origin” (an airline industry term with an unfortunate acronym) also plays a role.

What is a Point Of Origin?

The Point of Origin on an airline ticket is the place where the first flight on your itinerary departs from.

For example, if you booked a round-trip ticket from Sydney to Tokyo and back, your ticket’s Point Of Origin would be Sydney, Australia. But if you booked a return ticket from Tokyo to Sydney, your Point of Origin is Tokyo, Japan.

The same concept applies to multi-city and round-the-world tickets, where the Point Of Origin is simply wherever the first sector on the itinerary departs from.

Why does this matter?

An airline ticket’s Point Of Origin, as well as the Point Of Sale (the country where the ticket is purchased) can have a few implications.

The obvious one is the currency that your booking is charged in. If the Point of Sale on your ticket is Australia (as is generally the case for bookings with a Point Of Origin in Australia), you’ll usually be charged in Australian dollars. Likewise, if you’re booking from another country, the fare is usually charged in that country’s local currency.

The Point Of Origin or Point Of Sale on your ticket can also affect the availability of fares in each RBD (fare class), as well as the price.

Airfares are filed differently in different markets

Airlines file airfares in different markets with different pricing and conditions. This often works to the disadvantage of people in Australia because base fares on itineraries departing Australia are typically higher than fares from other countries to Australia.

Trans-Atlantic fares booked from the United States to Europe are also often more expensive than equivalent round-trip airfares from Europe to the United States.

Here’s an example of a return Business Class airfare from Rome to New York with ITA Airways (this would be charged in Euros but we’ve converted the price shown below to AUD to make the comparison easier):

ITA Airways Business Class "I" airfare from Rome to New York — ITA Airways Business Class “I” airfare from Rome to New York. Screenshot from ITA Matrix.

And this is an equivalent return Business airfare in the opposite direction – from New York to Rome – in exactly the same booking class (again, the price shown is in AUD):

ITA Airways Business Class "I" airfare from New York to Rome — ITA Airways Business Class “I” airfare from New York to Rome. Screenshot from ITA Matrix.

Even in Economy Class, ITA Airways is charging almost $200 less for a round-trip ticket from Rome to New York in the same fare class than the other way around.

This concept doesn’t just affect commercial airfares. There can be a huge difference between the carrier charges applied to reward bookings made in different markets – even though the same flights are used!

Carrier charges on Japan Airlines international flights

While taxes and carrier charges are generally not payable on Japan Airlines domestic flights, they are applicable on Japan Airlines international flights. But the amount varies enormously, depending on where you start your trip.

The exact amount of Japan Airlines carrier charges depends on your ticket’s Point Of Origin and may be significantly higher on international itineraries originating in Japan, compared to trips originating in Australia or other countries.

For example, if you redeemed Qantas points for a return Japan Airlines Premium Economy ticket from Sydney to Tokyo, you’d pay a total of $177.54 in taxes & carrier charges. This includes just $11.40 worth of carrier charges.

Qantas website quote for a return JAL Premium Economy reward booking from Sydney to Tokyo.

The same Qantas Classic Flight Reward booked in the opposite direction, flying Japan Airlines Premium Economy return from Tokyo to Sydney, attracts a whopping JPY141,600 (~AU$1,500) in taxes and charges. This includes a carrier charge component of JPY131,000 (~AU$1,387). Crazy!

Qantas website quote for a return JAL Premium Economy reward booking from Tokyo to Sydney.

British Airways trans-Atlantic carrier charges

British Airways Boeing 777-300ER at Heathrow Airport — British Airways carrier charges are heavily impacted by a ticket’s Point Of Origin. Photo: Nick Morrish/British Airways.

As another example, British Airways’ carrier charge on a one-way Business Class reward ticket from New York to London is a whopping USD850 (~AU$1,268) per passenger.

Example of a Qantas Classic Flight Reward ticket for travel on British Airways from New York to London.

But if you book a one-way British Airways flight using Qantas points from London to New York, the carrier charge component drops to GBP275 (~AU$485). The third-party taxes are much higher, though, due to the UK Air Passenger Duty.

Example of Qantas Classic Flight Reward pricing for travel on British Airways from London to New York.

The British Airways carrier charges on the New York-London route are again different, though, if the Point Of Origin on your ticket is in Australia. For example, if you booked a Sydney-New York flight as the first sector on a multi-city itinerary that also included New York-London, the Point Of Origin would be Australia and the carrier charges payable to British Airways for the trans-Atlantic sector would reduce accordingly.

In the example shown below, the carrier charges for the Qantas flight are $75. The carrier charges applicable for BA178 are therefore $322.60 (in Australian dollars). That’s a saving of almost $1,000, compared to the carrier charge applied on a New York-London ticket originating in the USA!

Qantas award ticket from Sydney to London via New York — By changing the Point Of Origin to Australia, the British Airways carrier charges reduce substantially. Screenshot from the Qantas website.

A lot more goes into airline pricing than first meets the eye…

You can leave a comment or discuss this topic on the Australian Frequent Flyer forum.

Matt Graham

The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 80 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can connect with Matt by posting on the Australian Frequent Flyer community forum and tagging @AFF Editor.

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L LondonAussie Nov 13, 2022 #1

So the article says:

base fares on itineraries departing Australia are typically higher than fares from other countries to Australia.

But over the years I've always found it to be the opposite with UK to Australia fare being much higher than Australia to UK fares. So much so that many Aussies living in the UK will buy a one-way back to Australia to then start a cycle of 12 month return tickets from Australia back to the UK.

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SYD Nov 13, 2022 #2

This is quite relevant to the reoccurring question on forums of whether to book return rewards (which quite often means waiting for the return date to become available and risk loosing the outbound) or two oneway tickets (book them as they become available).

For Oz to overseas, the consensus here seems to be book one-ways and don’t even bother calling up to add the return flight (because “it will price the same”, other than currency used in the PoS for the return flight). This article suggests otherwise and I have experienced this myself.

For example, a few years ago we booked seperate SYD-LAX // LAX-SYD 2x QF J rewards. The return flight fees seemed excessive and I think we ended up paying almost double in total compared to a return reward redemption. Interestingly, I looked at the same itinerary a few months ago and 2x one-ways was pricing more or less the same as a return.

It certainly pays to research the oneway / return fees before you try and book.

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Gold Member Nov 13, 2022 #3

Aside from the obvious, a key point from Matt’s article is:

“the “carrier charge” component goes directly to the operating airline and is essentially just an arbitrary fee.”

So the likes of Qantas, BA, Emirates etc are just taking you for a ride while lining their Executives and Shareholders’ pockets. Vote with your wallet, change/abandon your affiliation with these type of Frequent Flyer Programs as necessary.

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g gkgkgk Nov 14, 2022 #4

Thank you for this article. It was very helpful to learn how the Point Of Origin impacts the YQ/YR in this article.

If I understood correctly... say if my RTW journey begins in Sydney, all remaining sectors, regardless of which carriers or if open jaws are involved, each carriers would consider Sydney as my point of origin when calculating the YQ/YR, is this right?

Or does a carrier begin counting the Point of Origin only when their aircraft are involved in a particular section for the first time? (For example, if I fly BA from SYD to SIN, then JL from SIN to HND, does JL consider SYD or SIN as the point of origin for YQ/YR on the SIN to HND flight?)

Thanks!

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Mattg Nov 14, 2022 #5

Thank you for this article. It was very helpful to learn how the Point Of Origin impacts the YQ/YR in this article.

If I understood correctly... say if my RTW journey begins in Sydney, all remaining sectors, regardless of which carriers or if open jaws are involved, each carriers would consider Sydney as my point of origin when calculating the YQ/YR, is this right?

Or does a carrier begin counting the Point of Origin only when their aircraft are involved in a particular section for the first time? (For example, if I fly BA from SYD to SIN, then JL from SIN to HND, does JL consider SYD or SIN as the point of origin for YQ/YR on the SIN to HND flight?)

Thanks!

If you have a multi-city/RTW booking where the first flight departs from Sydney, the POO (unfortunate acronym) for all flights on the same ticket is Sydney/Australia.

Reply 2 Likes

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M MEL_Traveller Nov 14, 2022 #6

One thing to check with flights starting outside Australia is your insurance cover.

Most policies require you to have return travel and tickets, and sometimes this needs to be purchased prior to departing from Australia.

Nesting tickets - buying one way ex AU and then return tickets from overseas to AU - can invalidate some policies either because the round-trip was not purchased in its entirety before leaving, or because the nesting of tickets takes you outside the trip duration of an annual policy.

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k kangarooflyer88 Nov 14, 2022 #7

One item that wasn't discussed in the article was the use of award miles as an effective way to position oneself for cheaper fares (be it cash or award). In particular sometimes the cost in points to get to somewhere in Europe to set yourself up for that cheap fare can be relatively low using points (i.e. LHR to CPH is like 6000 Avios IIRC and that tends to be a city of cheap ex-EU fares).

But over the years I've always found it to be the opposite with UK to Australia fare being much higher than Australia to UK fares. So much so that many Aussies living in the UK will buy a one-way back to Australia to then start a cycle of 12 month return tickets from Australia back to the UK.

This has not been my experience. Indeed, the last time I had to fly UK to Australia (January 2020), I found an excellent economy fare on United - LHR > SYD return for ~$1100 CAD (~$900 USD):

View image at the forums

And the cherry on top? My points upgrade to Polaris Business class went through for only 35,000 miles + $600 USD co-pay (since I was on a cheap K fare). Not bad for 32 hours of Polaris service on the outbound!

This is quite relevant to the reoccurring question on forums of whether to book return rewards (which quite often means waiting for the return date to become available and risk loosing the outbound) or two oneway tickets (book them as they become available).

For Oz to overseas, the consensus here seems to be book one-ways and don’t even bother calling up to add the return flight (because “it will price the same”, other than currency used in the PoS for the return flight). This article suggests otherwise and I have experienced this myself.

A benefit of booking a one-way is there is a bit more flexibility on the tickets. If something goes awry and you need to make changes you only touch part of the itinerary rather than the whole thing. This can also be beneficial depending on routing rules with certain frequent flyer programs.

If you have a multi-city/RTW booking where the first flight departs from Sydney, the POO (unfortunate acronym) for all flights on the same ticket is Sydney/Australia.

Point of Sale can make a huge difference all else being equal. I had a colleague who needed to fly United Polaris from India to Canada. Booking the ticket out of India or Canada worked out to something like $5000 USD whereas booking it on a US travel agent (i.e. Expedia.com) resulted in a 3,200 USD fare for the same flights!

A related concern is that of plating. Sometimes the exact same flight and fare but plated with another airline can make prices go down too. For instance, for a long time in Canada it was substantially cheaper to book Air Canada business fares from Toronto to San Francisco on United.com (having it ticket as a United marketed flight).

-RooFlyer88

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JohnK Dec 10, 2022 #8

For many years I used to book return airfares ex-SIN or ex-BKK to Australia as they were much cheaper. No seasonality and school holidays did not affect the airfares.

For quite a few years those airfares have caught up and with exchange rates could even be more expensive.

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