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Award Fuel Surcharges Masquerading As 'Taxes'.....Time For An 'Inside Flyer' Expose

Award Fuel Surcharges Masquerading As 'Taxes'.....Time For An 'Inside Flyer' Expose

 
Old May 21, 08, 12:10 pm
  #106  
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Originally Posted by flysurfer View Post
Why are carriers raising fuel surcharges instead of raising fares?
That's an easy one: Because company discounts only apply to the fare portion, not to the surcharge portion of a fare. So a $10 raise in surcharges earns the airline more money than a $10 fare raise, especially with frequent flying business customers. Plus, they can add these surcharges to awards w/o changing an attractive-looking award chart.

Why are surcharges lower for some cheap Economy fares than they are for award flights on the same route/carrier or for more expensive fares on the same route/carrier?
Carriers like LH need catchy fares for advertisement reasons, like a EUR 99 domestic roundtrip. If they applied the full set of surcharges to such an offer, the fare basis would have to be negative (like -25 EUR) in order to achieve the desired advertised price. For FTers, this would be a means to literally print money: Just cancel the ticket and get a higher amount of taxes/fees/surcharges back on your CC account than what you actually paid for the entire ticket (taxes/fees/surcharges plus negative fare) in the first place. Remember: the fare portion of such tickets is non-refundable, the taxes/fees/surcharges portion is, at least with LH. Hence, LH and others are sometimes tampering with the surcharges in order to avoid zero or even negative fares.
If this is true, its a clear case of deception and fraud. If any individual conducts themselves in such a way, its theft.

I too would be interested in randy taking this up with the airlines or maybe he won't?
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Old May 21, 08, 2:25 pm
  #107  
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Originally Posted by A_Lee View Post
Randy, I'm not sure why you can't see this for what it is unless you don't fly much outside the U.S. For most international travelers it is very clear what the airlines are doing.
I'm not sure why you would be questioning my credentials. For the record, since I started InsideFlyer I've earned more than 12 million miles, 60% of them coming from BIS miles. I've done trans-Atlantic more than 150 times and trans-Pacific more than 75 times and i've done more than 75% of this international travel in coach, which i'm most proud of because i'm certainly not a pampered or spoiled long-haul passenger. So, while you may be an even more astute international traveler than I, I think I really do understand what is being talked about here, though I may disagree with some of your points like some other members who have posted here regarding "what airlines are doing." And of course if you'd like to join me, i have four more trans-Atlantic trips over the next two months, feel free to join me in Frankfurt (Lufthansa visit), Nice (Unisys consulting/speech), Istanbul (Turkish Airlines visit) and Rome/Casablanca (Alitalia/Royal Air Maroc visits). That aside, I do get around...

Originally Posted by holtju2 View Post
Maybe Randy has a problem with this issue because most of the ads on his magazine are paid by the companies questioned here?
Might I suggest you do your homework before making any assinine assumption like this? I just scanned a few pages and here are the following airlines i saw mentioned by members: ANA, LH, BD, AF, AA, BA, SK, OS, LX. Check the facts yourself, none of these airlines advertise in InsideFlyer, so it is hardly a factor and has never been a factor before in issues that i get involved with. I might suggest you re-check your sources. My only problem is something called "time."

I'm very sorry i haven't had the time recently to read through all this but was extremely backed up from the Freddies, I really had other things that needed my attention and were in line before this thread started. That may not meet your agenda, but you know, I really do have a day job.

I will try to address this as soon as i catch up on just a few more things around the office.
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Old May 21, 08, 2:55 pm
  #108  
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Originally Posted by icarius View Post
If this is true
You can easily prove this. Just go to lufthansa.com and price the very same domestic flight as a full-fare (Y) and discounted (E) flight and compare the taxes and fees. If you have the miles and a M&M account, you can also price it as an award and compare the taxes/fees/surcharges.

I suggest you use the US site, which adds no additional POS charges. If, for example, you use the German POS, LH will slap a TSC (ticket service charge) on top of it as a penalty for you buying your Lufthansa ticket on lufthansa.com and doing all the work by yourself. In addition to that, Lufthansa will also add a 4 EUR credit card fee as a penalty for you using a Lufthansa issued credit card when buying a Lufthansa ticket on lufthansa.com.

Example:
MUC-DUS-MUC, 9/9-9/17, LH824 & LH853, all examples using lufthansa.com, and using 1.56 for EUR/USD conversion

E class: 14.00 USD fare + 103.98 USD taxes, fees and charges (= 117.98 USD)
Y class: 662.00 USD fare + 125.98 USD taxes, fees and charges (= 787.98 USD)
X class: 24,000 miles + 125.98 USD taxes, fees and charges

Now, buying this very flight not in the US but in Germany, adds further costs, as LH will calculate several taxes, fees and surcharges in EUR instead of USD, using an "exchange rate" of 1:1. Note that the difference in taxes, fees and charges is (what a coincidence) exactly 22 USD in the example above, and exactly 22 EUR in the example below. It's really "magic":

E class (POS Germany): EUR 9.00 fare + EUR 79.84 (124.55 USD) taxes, fees and surcharges (= 138.60 USD)
Y class (POS Germany): EUR 427.00 fare + EUR 101.84 (158.87 USD) taxes, fees and surcharges (= 825 USD)

Now add another mandatory EUR 14.00 (ca. 22 USD) per ticket (10 EUR TSC + 4 EUR credit card penalty), and you'll end up with 160.60 USD and 847 USD for E class and Y class (vs. 117.98 USD and 787.98 USD when bought in the U.S.) for the very same flights on the very same day using the very same fare, always booking on lufthansa.com.

So yes, LH is not only calculating different fees for different booking classes of the very same flight in the very same service class, they are also calculating different surcharges depending on the POS (country) where you buy that flight using identical fares. Plus, they rather whimsically add (or better: invent) additional charges and fees depending on this POS (country).

Last edited by flysurfer; May 21, 08 at 3:28 pm
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Old May 21, 08, 2:55 pm
  #109  
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^^^ to Randy!

My own personal opinion is that when an airline quotes a fare, the "fare" should be what goes to the airline. The +++ part should ONLY include what goes to others - airports, Customs & Immigration authorites, etc. "Fuel surcharges" clearly go to the airline, and they should not be there, fuel costs are part of running an airline, and they should be incorporated into the fare.

Where this comes into play is in regard to award flights, as well as other scenarios which have been mentioned.

When I use miles/points for an award flight, the miles/points should cover the actual "fare", with the +++ (charges levied by airports and governments) picked up by the passenger.

Having to contribute towards the fuel (via a fuel surcharge) is NOT something which you should have to do, it should be incorporated into the fare (which is being paid for by way of points/miles).

Sorry for waffling, but it was a long night at work.

Randy, I hope you can see the issues which have been posted. I look forward to your next trip to SYD, hopefully in a few months in time for the first QF A380. We might see a QF B744 decapitated!

Dave
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Old May 21, 08, 3:34 pm
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Originally Posted by Randy Petersen View Post
[snip]

Might I suggest you do your homework before making any assinine assumption like this? I just scanned a few pages and here are the following airlines i saw mentioned by members: ANA, LH, BD, AF, AA, BA, SK, OS, LX. Check the facts yourself, none of these airlines advertise in InsideFlyer, so it is hardly a factor and has never been a factor before in issues that i get involved with.

[snip]
I don't make the claim that the prior poster did with respect to your journalistic practices, but, FWIW, I've seen BA and LH ads here within the last couple of days.
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Old May 21, 08, 3:43 pm
  #111  
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Originally Posted by JeremyZ View Post
I don't make the claim that the prior poster did with respect to your journalistic practices, but, FWIW, I've seen BA and LH ads here within the last couple of days.
I don't think any airline would decide not to advertise on FT just because FTers, including Randy, turn up the heat from time to time. Companies advertise in order to reach a target audience; it's that simple. We FTers boycott airlines all the time for all kinds of personal reasons, but companies don't normally engage in such costly temper tantrums.
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Old May 21, 08, 4:09 pm
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Originally Posted by nsx View Post
I don't think any airline would decide not to advertise on FT just because FTers, including Randy, turn up the heat from time to time. Companies advertise in order to reach a target audience; it's that simple. We FTers boycott airlines all the time for all kinds of personal reasons, but companies don't normally engage in such costly temper tantrums.
Like I said, I'm not saying anything beyond what I'm saying. I do know that Randy likes to respond with research and precision, and I was just trying to help us get there.
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Old May 21, 08, 4:22 pm
  #113  
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Off topic again. His accusation was about InsideFlyer magazine, yours is about FlyerTalk.com. It is well known among those who read the news more than a year ago that i have absolutely nothing to do with the advertising end of FlyerTalk since Feb. 07. I don't sell it, i don't gain from it, i have nothing more to do with it than you do as a regular member. So, if you want to continue with these off-topic and truly inaccurate side conversations, then fine. but please don't rag me when i can't help you with the real thread topic. This is not OMNI, members are trying to discuss a real issue with regard to frequent flyer programs.

Originally Posted by JeremyZ View Post
I don't make the claim that the prior poster did with respect to your journalistic practices, but, FWIW, I've seen BA and LH ads here within the last couple of days.
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Old May 21, 08, 4:24 pm
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Yes. I note that the OP is still very much unresolved.
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Old May 21, 08, 8:03 pm
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Originally Posted by Randy Petersen View Post
I'm not sure why you would be questioning my credentials. For the record, since I started InsideFlyer I've earned more than 12 million miles, 60% of them coming from BIS miles. I've done trans-Atlantic more than 150 times and trans-Pacific more than 75 times and i've done more than 75% of this international travel in coach, which i'm most proud of because i'm certainly not a pampered or spoiled long-haul passenger. So, while you may be an even more astute international traveler than I, I think I really do understand what is being talked about here, though I may disagree with some of your points like some other members who have posted here regarding "what airlines are doing." And of course if you'd like to join me, i have four more trans-Atlantic trips over the next two months, feel free to join me in Frankfurt (Lufthansa visit), Nice (Unisys consulting/speech), Istanbul (Turkish Airlines visit) and Rome/Casablanca (Alitalia/Royal Air Maroc visits). That aside, I do get around...
My sincere apologies for thinking perhaps you didn't travel internationally much. Anyways, if you disagree that the fuel surcharge is not a means for airlines to fleece frequent flyers cashing in on international award tickets and for trying to hide the real cost of their tickets, then please do offer some other logical explanation for why they are doing this. I think a large percent of us cannot see any other reason for it going on so long after it has become very clear that higher fuel prices are here to stay and not some temporary phenomenon.

The fuel surcharge when it was first introduced was an annoyance but with the continued increasing of the fuel surcharges, especially in the past year, this has gone from a minor annoyance to by far the single biggest FFP issue for me. I feel it is absolutely imperative that something be done about this or it will soon make many FFPs become almost worthless for many frequent flyers. I cannot over emphasize the importance of this issue.

Last edited by A_Lee; May 21, 08 at 8:08 pm
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Old May 22, 08, 9:48 am
  #116  
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One thing to add here (sure, it might be considered a segway, but it is something I think that the airlines might throw up, so am throwing it up firstly to counter that) is that sure, fares have increased, whilst award redemption rates have stayed the same.

Big deal, fares have increased, but miles/points earnt have stayed the same.

Apart from some airlines where the points/miles you earn is based on $ spent, the vast majority of miles/points is based on distance flown. So the amount of miles/points has remained static, despite the cost going up to purchase said flights.

So if the miles/points earnt has remained static (despite the cost going up) why should redemption costs go up (as a result of airfares going up?)

We are paying more to earn those miles/points, it is only fair that the miles/points needed for award flights should not also go up, but should stay static.

This is purely in relation to the fuel fines which airlines are imposing on award bookings, which shouldn't be there in the first place.

Dave
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Old May 22, 08, 1:07 pm
  #117  
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Originally Posted by thadocta View Post
Big deal, fares have increased
Actually, they haven't, at least not much.

Many fares stayed pretty stable over the years, some even went down. Only the surcharges kept going up. On LH, domestic fares went as low as USD 1.00 and should actually have turned negative, because even one single dollar was not low enough after adding regular surcharges, so LH had to manually cut some of these surcharges in order to get an advertisable total price. See my above calculation for details.
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Old May 22, 08, 3:32 pm
  #118  
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Fares and surcharges have actually gone up over the period of last 4 years. SQ for example have raised their fares on at least2 occasions of about 10 to 15% with fuel surcharge being adjusted on at least 3 different occasions. They have also adjusted their excess baggage allowance with the public release being tailored to " add convenience to customers" when it could actually mean more. their latest annual report showed revenue growth with a statement saying they are "prepared to weather any decline in business travel due to the credit crunch."

The customer at the end looks at the final price and if its too expensive and with a choice, we will walk.

AA, one of the american legacy carriers have now started to implement charging for checking even 1 bag. They have also removed meals.I'm not sure if they charge the fuel surcharge but i think they don't for rewards.

The airlines have also reduced their baggage allowance from 32kg to 23kg.

Both these examples may be the exception but they detail a few of the examples that the airlines may be taking advantage of fuel surcharge as revenue boosters rather than cost recovery.

Last edited by icarius; May 22, 08 at 10:14 pm
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Old May 22, 08, 3:59 pm
  #119  
 
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Originally Posted by Dovster View Post
Tell me about it! El Al uses points, not miles, and charges 900 points (which represents a lot more flying than 50,000 miles would) for a r/t ticket TLV-MXP-TLV. In addition, you have to pay $491.

I just bought the ticket without using any points and paid 10 cents less.
I just stopped accumulating on LY.I noticed in January when they had a deal to cash in 1100 points instead of 1400 for a ticket on "selected" flights to New York,I paid nearly $400 for a free ticket(today it is $497) and a friend paid $599 plus 100 points. I switched ALL my flying and accumulating to DL.
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Old May 30, 08, 10:26 am
  #120  
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friendly bump...hoping for feedback?
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