The cost of a “free” reward ticket

Aeroplan has a harsh bereavement policy, which requires widows and widowers to pay 1 cent a mile to transfer points after their spouse has died. When I wrote about this in my column, I heard from many readers who had beefs about both Aeroplan and Air Miles.

Did you know you still have to pay a fuel surcharge when you use your points to get a reward ticket? Both programs have kept the fuel surcharges, even though many airlines have dropped them (including Air Canada on North American flights) as oil prices have plunged.

I checked Aeroplan’s website and found a vague question and answer. Since it told me nothing, I called Aeroplan’s customer service (as instructed) and got the real story.

Yes, Aeroplan does have a fuel surcharge for reward tickets, I was told. It has nothing to do with fuel costs and is misnamed. It’s there because Aeroplan hasn’t adjusted its points levels in a few years. This is another way of compensating the airlines for the reward tickets earned by members.

I asked Air Miles about the fuel surcharge and got an official answer, posted below, and a response from an angry reader.

Of course, there are many other taxes and fees you end up paying when you get a “free” ticket. That’s the reason why many people would rather just buy a discounted airfare and use their points for something else.

Author: Ellen Roseman

Consumer advocate and personal finance author and instructor.

42 thoughts on “The cost of a “free” reward ticket”

  1. Boy, this topic is likely to get plenty of responses. Aeroplan has become a joke.

    I was looking at using my points simply to use them up and forget about Aeropain (spelling intentional) entirely. A “free” ticket in North America was well over $200. A free ticket to Europe was still over $200, but varied depending on destination.

    Why spend $300 and 72,000 AP points to fly to Italy in a roundabout way, when I can pay $765 CAD, use NO points, get the flights I really want and gain 1% back on my credit card?

    I’m planning on using my points and then I’ll be joining the ranks of former Aeroplan members and finding a better way of racking up travel points.

  2. The Aeroplan cost to fly to a California destination is 25,000 points and $150 airport charges (Toronto and the destination airports inclusive), plus another $30 if you book it with an agent rather than at the Aeroplan website.

    I gave up my credit card that allowed me to collect Aeroplan points a long time ago, since any savings with Aeroplan were offset by the credit card annual fees (with a spouse card, the fees are higher).

    I only use the 1% cash back credit cards, which CIBC and AMEX Costco offer with no annual fees.

    And what do I do with the cash back at the end of the year? I use it as a lump sum payment for my mortgage.

    I have my peace of mind and a better investment in the long term.

    PS: I have been collecting Aeroplan points only when traveling with Air Canada or its partners.

  3. Air Canada requires Aeroplan to collect fuel surcharges on all ClassicFlight Rewards.

    For international destinations, the fuel surcharge amounts are equivalent to those charged by Air Canada when customers purchase a regular ticket.

    The North American fuel surcharge for ClassicFlight Rewards is $27 per one way (while those for international flights vary by market and are the same as for Air Canada tickets).

    Air Canada reflects the cost of fuel (for North America) in its ticket prices, which may increase or decrease accordingly.

    However, Aeroplan does not vary its mileage levels for ClassicFlight Rewards and is required to collect a separate surcharge reflecting Air Canada’s cost to purchase fuel as a result.

    Air Canada determines these amounts based on its cost to purchase fuel.

    Further enquiries should be directed to Air Canada.

  4. This is all about managing your travel points from various sources and getting the best bang for the buck.

    I have Aeroplan, Air Miles (I think I will be in my 90s before I can get a flight! We use it for Christmas gifts for movies and gift cards at the Bay.)and a TD Travel VISA. We are traveling from TO to Vancouver in May. I locked into a seat sale in January and bought it with TD Travel points through TD Travel. The I used my Aeroplan points to rent a car for two weeks.

    This is win/win! As I said, it’a all about managing your points!

  5. The latest run of Royal Bank “Avioning” commercials just adds more fuel to the fire.

    Here they are promoting their guy, the “Avioner”, as a true gentleman who always knows the smart way to travel. He’s become the spokesperson for Avion and he wants to share his knowledge with other travelers.

    So perhaps “HE” should also share the important fact that Avion also requires you to pay the fuel surcharge and other taxes and it’s not really the “smart way” of using your points to get your ticket.

    I agree with one of the previous commentators. I’ll soon be looking to switch out of “Avioning” unless they quickly rethink their position on fuel surcharges.

  6. Hi Ellen,
    I was very interested to read JD’s situation (July 17, 2009) with transferring the travel points from her deceased father’s MBNA card to her mother. I too would like to transfer points from my mom’s VISA Platinum Travel Card to my own. She died the end of May and I am her beneficiary but VISA is telling me I can’t inherit her points. Do I have a chance?

  7. Aeroplan’s website and agents are quite funny and strange at the same time for flight redemption. If you want to go from point A to B and if there is a direct Air Canada flight from A to B, you will not be offered that direct flight. Instead you have to go from A to C to B. You might think that there might not be availability for the direct A to B. Boo, that is not true. If you want to go to another point D, which is near B, the routing that is offered is A to B to D. Note that A to D also has a direct flight. This clearly is discrimination towards reward ticket holders.

  8. On Dec. 16, I purchased two Aeroplan tickets to Miami from Toronto for Jan. 31, 2010 at a cost of 135,639 in Aeroplan miles and $240.58 in ADDITIONAL taxes.

    I subsequently telephoned Avion, which I also have air miles with, and was advised by the Avion representative that tickets for the identical Air Canada flight could be purchased for under 60,000 air miles for the two of us, points per person, INCLUDING airport taxes.

    I will be phoning Aeroplan on Monday to cancel my tickets at a further cost of $180 and rebook with Avion. It will still be worth the difference. What a ripoff.

  9. I had a similar experience looking into fuel surcharges recently for an Aeroplan ticket to NYC from Montreal.

    Nothing much has changed except that the fuel surcharges have risen even more since April 2009.

    I noticed Christa Poole from Aeroplan’s response to you. Aeroplan’s response is inaccurate and misleading.

    She says “Air Canada requires Aeroplan to collect fuel surcharges on all ClassicFlight Rewards”. Then she says fuel costs are reflected in the base ticket prices (which means there are no fuel surcharges to Air Canada customers).

    Clearly, Air Canada does not “require” anything. In fact, Air Canada acknowledged to me that fuel surcharges are at best an approximation of fuel cost fluctuations that are adjusted over time and that it is an Aeroplan matter to decide what charges to levy to its point collectors.

    What has happened, possibly, is that Aeroplan has negotiated a rate with Air Canada that excludes a portion of the fuel costs, which is then added to the price afterwards so Aeroplan can state it is a third party charge. (Or there isn’t a fuel surcharge at all from Air Canada – who knows?)

    This is certainly not what a reasonable consumer would expect when they choose to fly on Air Canada to accumulate the points in the first place.

    I suppose the only thing that has changed is the length of time they have continued this shameful practice, disguising a temporary fuel charge from what it is – a permanent debasement of the value of the points.

    I personally am tired of: point devaluation, disguised fees, hard to book point redemptions on planes that are not full at the time of flight, convoluted routing with stopovers for no obvious reasons, and bureaucratic responses from both companies.

    I think I may tear up my Aeroplan Visa at the end of the current annual fee period after years of use and try to fly Porter and other airlines whenever I can.

    American and Advantage do not employ these artificial fuel surcharges and Porter is a pleasure to fly. Check both AA and Advantage online to see there are no fuel surcharges for either and their fees are way lower.

    Curiously, while Aeroplan imposes higher fees than Air Canada, Advantage’s fees are lower than American Airlines.

    Hopefully, more customers will vote with their feet and Air Canada and Aeroplan will then adjust.

  10. Aeroplan at least now details all the surcharges and taxes when you try book reward travel online, as I just did today.
    Christmas flight from London – Regina return… 80,000 points + $620.11 CAD in charges and taxes (fuel surcharge alone was $402.90).
    Same flights cash-only… £778 (about $1222 CAD).
    “Free flights” no more!

  11. At this point I would be happy if the total ‘taxes and surcharges’ for an award ticket matched the total of the exact same ticket purchased outright.

    If the points redemption only covers the base airfare, fine, but the extra charges try to reclaim some of that as well.

    As for the availability of Classic Rewards inventory, Air Canada/Aeroplan should make more of that inventory available to members with frequent flyer status.

    All of the scaling back of the rewards, in my opinion, is due to the watering down of the points because of all of the various ways of accumulating them. Now the people who earned them the ‘hard way’ by actually flying have to compete with the credit card collectors.

    I don’t agree that allowing Status members the ability to access seats at a higher redemption rate is an actual benefit or valid alternative. Why not make a portion of that 8% classic inventory availablity ONLY to members with actual frequent flyer status? And have that inventory there from day 356?

    Let the people who actually give Air Canada revenue have first dibs on those rewards. That would be a welcome change to the program.

  12. I have become fed up with Aeroplan. It’s ridiculous now what it has come to.

    I wanted to book a ticket from Ottawa to Cairo, and found that it would cost 80,000 points. Fees and taxes came up to $620. The cost of the regular ticket is $900.

    I actually fly to get my Aeroplan points, over 100,000 miles in just the last 6 months, and I’m starting to think the actual points are more than useless. If I need 80,000 points for a $300 discount, it’s pointless.

    I recently booked a reward ticket using my Delta points. I paid less than $50 to get the ticket that I wanted.

    Aeroplan may say they have a higher percentage of seats open for booking, but as far as I’m concerned, they essentially have 0 seats available for reward tickets since the fees/taxes are so high.

    I’d rather have a harder time finding reward tickets if that actually meant the ticket came without disproportionate fees/taxes.

    I agree with Shawn’s comment/suggestions. If they don’t make a change soon, they will lose more customers. I am already trying to cut down on my flying with Air Canada.

  13. I just tried to book two tickets to Nice, France, from Toronto, 120,000 miles.

    Fees and surcharges are $1,154.92, including $436 per ticket for a Fuel Surcharge. Who gets that? The airlines do.

    Separating ticket prices into a base fare and a fuel surcharge means the airline has a way to justify charging that fuel surcharge on reward purchases. It’s more than half the cost of the ticket when all other fees are put aside.

    To earn 120,000 miles from my credit card would require me to spend $120k. For the France trip, my reward flights are roughly $900 cheaper than buying the tickets outright, and only $600 cheaper than the best price comparable flight (same number of stops, roughly same flight times) on a competitor’s airline.

    So if I take the $900 number, thats a 0.75% payback. The $600 discount brings it down to 0.5%. That’s without taking into account the annual fee on the credit card itself.

    My conclusion: I’m better off with a card that gives me cash back and that’s what I’ll be moving to.

    I find the whole system overly complicated. I can’t help but think it’s done deliberately to dress up rewards as being more than they actually are.

    The gloss has definitely gone off of Aeroplan rewards for me, and with it, any “loyalty” I was likely to show to Air Canada.

  14. Aeroplan is a huge ripoff. I had a $160 bill for use of miles on a flight that cost $375 (Vancouver to Castlegar, B.C.).

    To put this in perspective, I most often use United Miles, and for the last three flights I booked through United, the fees were no more than $10 each.

  15. Aeroplan claims no bias and says that flight seats are not offering ridiculous scheduling, but I have chatted with and read (online) soooo many horror stories. Chatted with a rep today, what a joke… lied right to me.

    Not to mention, if you fly with points, the taxes are off the chart, anyway.

    I am fed up with Aeroplan. I’ll finish with my points, use them up, come hell or high water; but in the meantime I’ll work with TD Visa…there’s a fair plan. At least they treat you like a person!

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