Welcome to the Travel Hacking from Scratch Series – a series dedicated to getting those new into Travel Hacking up the curve as quickly as possible. Below is the layout of the series with links back to already published articles.
Today our topic is How to Avoid High Taxes and Charges – a look into how you can leverage your knowledge of airline policies to ensure you pay as little as possible in taxes and fees.
|The Benefits of Travel Hacking
|Credit Cards – Which Card and Why
|Churning Credit Cards
|US Credit Cards (ITIN)
|Using Your Points
|Alternatives to DIY
|Understanding the Power of Partners
|Weighing Convenience vs Cost
|How to Avoid High Taxes and Charges
|How to Travel Better
|Why You Need Status
|Understanding Your Rights
|Beyond Travel – Financial Freedom
When I started out in this hobby, I didn’t have a lot of disposable income but I had a penchant for travel that I needed to satisfy. Loyalty Programs and Frequent Flyer Programs (FFPs) allowed me to travel to places I had only dreamed of. I poured over thousands of forum posts and experimented with Aeroplan to see how I could reduce my cost as much as possible. It took a lot of work to figure it out but I was able to somewhat master the skill of finding the most economical routing to save myself as much out of pocket cost as possible.
I have written a lot about these things in the past and have done a TON of research to make it easier for you to understand and recreate for yourself so this post won’t be a very long one, but more so one that points you to the proper resources to consider when you’re trying to save taxes and fees.
In general, there are airlines that charge fuel/carrier surcharge (also known as YQ) and those that do not. There is no consistency as to which do and which do not. It does not matter if they belong to an alliance, partnership, or are completely independent. You cannot use those criteria to determine which airlines charge these fees and which do not. Instead, you are forced to learn them on your own.
Luckily, most Canadians are focused on one major program – Air Canada’s Aeroplan program. As Air Canada is part of the Star Alliance, you can use Aeroplan miles to book across 27 member airlines.
Of these 27 member airlines, 8 of charge fuel/carrier surcharge (YQ) all the time and 3 only charge it on certain routings. That means there are 16 member airlines that you can fly without having to pay for anything other than the standard security fees and airport landing fees.
Unfortunately, Air Canada is one of the programs that charge YQ so you have to figure out creative ways to minimize or altogether avoid flying on Air Canada flights when redeeming miles.
What You Need to Know
If you paint airlines with a very broad brush, there is one major rule that they have to follow in terms of routings. They can fly to and from their home country and that’s it. For example, Air Canada is based in Canada so they can fly from Canada to anywhere in the world and back. They cannot travel between two countries when one of those countries is not their own. There are exceptions to this rule but very broadly, that’s how you should understand the rules of how airlines are allowed to operate.
You may be thinking, “well, I live in Canada so how the heck to I fly another airline besides Air Canada for my award redemptions”? Well, we have another Star Alliance partner in the United State, United Airlines, which flies into Canada and can serve as a way to position yourself to an airport that another partner airline flies out of to get you to your destination.
Let’s look at flying to Istanbul (IST) for example.
You have quite a few choices to get to IST. The first one that the Aeroplan site will likely give you is a flight on Air Canada (AC) between Calgary (YYC) and Frankfurt (FRA), then onward with Lufthansa (LH) to Istanbul (IST). If you chose this option, you would be in for a shock when the taxes and fees were revealed to you.
The fees are so high because both Air Canada (AC) and Lufthansa (LH) charge an exorbitant amount of money for YQ so they should be avoided at all costs. When flying internationally with Air Canada, expect to pay a lot in fuel surcharge.
When this is the first option that the Aeroplan booking engine gives you, it’s no wonder why many people believe that Aeroplan is a straight-up ripoff. When you’re paying over $700 in taxes and fees, one is left to wonder why you even collect miles in the first place.
Rather than fall into the trap of selecting high-cost airlines to fly with, choose airlines that don’t charge you these fees. For example, you might want to look at something like Calgary (YYC) to Houston (IAH) on United (UA) or Air Canada (AC) and then onward to Istanbul (IST) with Turkish Airlines (TK). You may be thinking to yourself, “Air Canada? I thought he said to avoid Air Canada”. If you can avoid Air Canada, you should but if you have to fly them, fly them domestically or transborder – the YQ isn’t too bad.
If you can find a United flight, you’ll see that they, along with Turkish do not charge YQ, so your cost will be dramatically lower.
Unfortunately, the Aeroplan booking engine will not show you this routing, even though it exists and can be booked over the phone.
Because Aeroplan won’t show you the specific routing, I can’t give you exact pricing on the taxes and fees but at the very most it would be the taxes and fees of the two routes added together. Note that I was only able to find an Air Canada (AC) flight to Houston (IAH) but the combined taxes are significantly lower than if you flew Air Canada (AC) internationally to Frankfurt (FRA) and then Lufthansa (LH) to Istanbul (IST).
As you can see, if you know which airlines to use and which routes to concentrate on, you can significantly reduce your out of pocket expenses. The flight using Air Canada and Turkish Airlines will at most cost you $135.37, a far cry from the $703.38 the Aeroplan booking engine defaults to. If you can find a United flight from YYC-IAH, the cost would be even cheaper by about $50-70.
Unfortunately, there’s no magic bullet that will teach you everything in an easily managed reading, though I have tried to in a few posts:
2019’s MOST Comprehensive Guide to Fuel Surcharge (YQ) Using Aeroplan Miles
Finding Award Availability Series
Aeroplan’s Mini-RTW – Part 3 – Airlines with No Fuel Surcharge – Europe
Aeroplan’s Mini-RTW – Part 4 – Airlines with No Fuel Surcharge – Asia
Travel Hacking From Scratch – Part 10 – Weighing Convenience vs Cost
I also created a 30-minute video on how to find award availability that is a bit dated but still has the correct method. The only thing that is outdated is the method by which to find the routing information you need. Use FlightConnections rather than the Star Alliance Route Map, which no longer exists.
There’s no doubt that there’s a lot to know when it comes to finding the most economical way to book an award but when you master this skill, the world truly becomes your oyster. You are no longer handcuffed by the routing offered by Aeroplan’s booking engine which provides preferential treatment to Air Canada flights, which attract fuel surcharge.
This knowledge has served me very well through the years and I hope that this post helps to awaken the possibilities for you as well.