Qantas, Emirates close fuel surcharges loophole for frequent flyers

Qantas, Emirates close fuel surcharges loophole for frequent flyers

Qantas and Emirates are aligning their fuel surcharges on frequent flyer award tickets, closing a loophole which let savvy travellers avoid hundreds of dollars in Qantas fuel surcharges by using their points to book a codeshare flight on Emirates, which has a much lower surcharge.

Adopting a 'meet in the middle' approach, from Qantas will lower its fuel surcharges on the joint Qantas-Emirates network, while Emirates will raise theirs. The changes apply to tickets issued from 1 July 2013.

Fuel surcharges represent an added cost to what is nominally a 'free' ticket booked using frequent flyer points.

Qantas economy fuel surcharges down by 30%

Under the revised structure, Qantas says the fuel surcharge applied to a frequent flyer ticket in economy will fall by an average of 30 percent across the joint Qantas-Emirates network. 

For example, the Qantas fuel surcharge for one-way economy tickets from Australia to Europe will drop to $230, a saving of $150 on current rates.

Economy reward tickets from Australia to London return have been $610 cheaper when booked on an Emirates flight using Qantas Frequent Flyer points, due to the Qantas fuel surcharge of $760 being substantially higher than Emirates' $150 tariff.

As part of the alignment, Qantas will also introduce onto the Emirates network a new tiered system of fuel surcharges for frequent flyer tickets, mirroring the structure already used by Emirates and already employed by Qantas outside of Australia.

Redeeming points for an economy seat will attract a lower fuel surcharge than in premium cabins, although the number of points needed for each ticket will remain the same.

However, some business and first class redemption fares on Qantas will rise, including frequent flyer tickets from Australia to Singapore and Africa.

The new system will apply only on flights on the Qantas-Emirates network. Qantas stresses there will be no changes to the fuel surcharge for paid tickets, with the move impacting only frequent flyer award travel.

Emirates surcharges soar

The downside in this deal will hit Emirates, which is increasing its fuel surcharges across the board.

The fuel surcharge component of an Emirates frequent flyer ticket from Sydney to London – redeemed using either Qantas Frequent Flyer or Emirates Skywards points – will increase by $310, from the current $150 to $460.

Emirates will reduce the base fare accordingly, from $1,872 to $1,562 in that example, so that commercial ticket prices "will remain relatively unchanged", according to an Emirates spokesperson.

Read: Emirates increases fuel surcharge on Skywards award flights

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27 Comments

  • sagidec

    sagidec

    14 Jun, 2013 10:57 am

    If you're a Velocity Frequent Flyer or Etihad Guest, you can redeem your points/miles for Reward seats with Etihad Airways from Australia to Europe at what Emirates was charging before. So, your flight tax/fuel surcharge would still be between $100 and $200.

    Abu Dhabi and Dubai are not that far apart anyways.

    I redeemed an Economy ticket back in Dec 2012/Jan 2013 from SYD-AUH-FRA, GVA-AUH-KUL with Etihad Airways for 110,000 points + $130 taxes/fuel surcharge using Velocity Frequent Flyer.

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  • KG

    KG

    14 Jun, 2013 11:27 am

    David, just to be clear, these charges are only for QF FF members, using QF points to redeem on EK flights? Or is EK adopting a new structure altogether and will they charge their own EK members more when redeeming with EK points on EK flights? When you mention "no change" for a C or F ticket Australia - Europe stating 380aud, do you mean no change compared to old QF rates or EK rates?

    Looking at the table it is not all too bad. The only significant increase seems to be for Business and First class award tickets from Australia to Africa, with all others either marginally increased or decreased. 

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  • KG

    KG

    14 Jun, 2013 11:35 am

    Letting this sink in a bit more and reading your pasage:

     "However, the fuel surcharge component of an Emirates frequent flyer ticket from Sydney to London – redeemed using either Qantas Frequent Flyer or Emirates Skywards points – will increase by $310, from the current $150 to $460

    Are you saying that redeeming an EK ticket in Y with either QF or EK points would have cost 150aud for the return ticket previously, whereas it will now cost you 460aud?

    This leads me to believe the rates you mentioned are the old QF surcharges, so in esssence EK Skyward members will start paying significantly more for their reward flights. I wonder how that will go down with them. I guess QF members are "lucky" as the surcharges on QF were always more than on EK and with the new structure on average we will pay less charges, however, EK members draw the short straw.

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  • snaps

    snaps

    14 Jun, 2013 11:45 am

    A less partial headline could be: "Qantas lowers fuel surcharge for frequent flyers on the joint Emirates-Qantas network"

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  • David Flynn

    David Flynn

    14 Jun, 2013 01:09 pm

    Snaps: not sure why that would be 'less partial', unless one thinks the current headline is partial? It's not, in my book: it simply states the fact that the airlines have closed that loophole. It also has the benefit of brevity (it's tighter, reads better, plus we try to adhere to a limit of 65 characters for headlines, yours is 20 longer) and better constructed for SEO.

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  • PLATY

    PLATY

    14 Jun, 2013 02:15 pm

    David, why not:

    Qantas and Emirates Adjust Fuel Surchages for Redemption Seats

    Your title and content are indeed patial in implying that frequent flyers are deliberately exploiting poor old QF. In fact, there is a counter argument given QF is failing to lower fuel surcharges for premium tickets despite an approximate 3% fall in fuel price over the last 12 months (IATA have a fuel watch web site if you want to check facts in a few seconds) having raised the surcharges repeatly over the previous 4 years. 

    Your subtitle is also misleading in that the 30% fall applies to economy, not premium classes - so why not use a subtitle of

    Qantas Economy Fuel Surcharges Down 30%

    Sure you've reported the "facts" from the QF PR machine, put your own spin on it (to some extent fair enough since  frequent flyers like to know how to get the best deal), but then avoided doing any comparative discussion - why should the benchmark be the present - how have surcharges changed over recent years compared with the price of jet fuel - what do other airlines do...

    ...try booking a redemption business class seat to LAX on VA...pay $100 not $100s as per QF....

    For that matter, why not subtitle

    Qantas Raises Fuel Surcharges 30%

    And then put a qualifier in the text on African and Asian premium class flights.

    And as others have pointed out, why not point out the obvious - that there is now a disconnect between reward tickets and paid tickets and ask your QF contacts how they justify this....

    ...on second thoughts just give us the QF press release and we'll fill in the gaps for ourselves!

     

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  • David Flynn

    David Flynn

    14 Jun, 2013 03:21 pm

    Why not "Qantas and Emirates Adjust Fuel Surchages for Redemption Seats"?

    Because it's passive ('adjusts' vs 'closes loophole'), boring and also lacks 'frequent flyer' - a term more people can relate to than 'redemption seats', which tends to be a bit more 'jargon'.  Yes, that suggested heading works in functional terms, but where possible, a good headline should be more than that.

    "Your title and content are indeed patial in implying that frequent flyers are deliberately exploiting poor old QF."

    I see the headline identifying that there is a loophole (fact), that this loophole is relevant to frequent flyers (fact) and that the reason for the fuel surcharge adjustment is to close this loophole (fact). But as it happens, frequent flyers have been using this loophole.

    "In fact, there is a counter argument given QF is failing to lower fuel surcharges for premium tickets despite an approximate 3% fall in fuel price over the last 12 months (IATA have a fuel watch web site if you want to check facts in a few seconds) having raised the surcharges repeatly over the previous 4 years."

    That's true, and that's a different story to this one. This story isn't about airlines failing to lower fuel surcharges in accord with the reduced cost of fuel. It's specifically about today's move by Qantas and Emirates, because that's the 'news'.

    "Your subtitle is also misleading in that the 30% fall applies to economy, not premium classes - so why not use a subtitle of Qantas Economy Fuel Surcharges Down 30%"

    Yep, you're bang on that one - I was updating the article with headers in a rush, and left out 'economy'.

    As to the rest of your suggestions: PLATY, putting all of that together means a very different article than the one I've written – loading it up with a lot of extra content, taking it in a different direction and making it substantially longer as well as a hell of a lot more cluttered, which is not what a news story is about.

    So while that could well be a good article on its own, that's not the job here. The job here is to report the news element and its immediate impact, which readers can take away as it stands or use as a jumping-off point for further discussion.

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  • Mal

    Mal

    14 Jun, 2013 04:34 pm

    David, putting the whole QF/EK fuel surcharge issue aside, I must admit that insight I am getting into how these articles are put together, especially the 'art' of headlines, is fascinating from an outsider's perspective!

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  • PLATY

    PLATY

    14 Jun, 2013 08:43 pm

    Yes, David, made some great explanations above!

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  • PLATY

    PLATY

    14 Jun, 2013 04:37 pm

    Yep, all makes sense, David...also a very useful reminder of the imminent changes so travel plans and frequent flyer strategies if individials feel it of sufficient interest...

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  • Al Glidden

    Al Glidden

    14 Jun, 2013 03:27 pm

    PLATY, here's an idea, why not go off and start your own website instead of always complaining about the articles on AusBT and how you think they should be written? Or maybe you could ask David about contributing to AusBT and writing those articles yourself instead of just sitting back and saying "Here's how it should be done!".

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  • PLATY

    PLATY

    14 Jun, 2013 04:33 pm

    Thanks, Al, for the suggestions...shame on me for supporting Snaps and seeking to broaden the lines of discussion.

    Here's an idea, why not bypass any post of mine instead of always complaining about them rather than addressing the opinions and rationale expressed...

    ...safe and happy travels!

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  • TheRealBabushka

    TheRealBabushka

    14 Jun, 2013 12:39 pm

    " Qantas stresses there will be no changes to the fuel surcharge for paid tickets..."

    Shouldn't a surcharge on fuel be exactly the same for revenue and redemption bookings?

    If in fact a fuel surcharge is levied to offset the cost of higher fuel bills, surely then it should be consistent for all passengers in the same cabin on the same flight, regardless of the type of ticket the pax holds?

    By making a distinction between the fuel surcharge of revenue and redemption bookings, has Qantas not exposed the farsical extent of this charge as well as alluding to the real nature of the surcharge; that being just another revenue item to milk the consumer, similar to the credit card surchage?

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  • KG

    KG

    14 Jun, 2013 01:03 pm

    Agree with TRB, they should be the same and that is exactly why EK is lowering their commercial base fare in order to keep ticket pricing on par with what they are currently charging for revenue tickets (thus offsetting the higher fuelcharge with a lower base fare).

    We should expect that QF revenue tickets will be altered to reflect the lower (and in some cases higher) fuel surcharge. Not holding my breath though.....

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  • Mal

    Mal

    14 Jun, 2013 04:31 pm

    Yes, the whole fuel surcharge issue is just smoke and mirrors for playing with numbers. It should be 'everybody pays' or 'nobody pays', regardless of where they sit and how they book their ticket.

    What is interesting is that EK never even had a fuel surcharge for frequent flyer redemptions until it hooked up with Qantas, then all of a sudden on March 31 2013 there was a fuel surcharge on those tickets.

    I have this mental picture of Qantas and Emirates teams at some meeting to discuss the forthcoming alliance, Qantas saying to Emirates "Wait a minute, you don't charge ANY fuel surcharge on award travel? Mate, we do it, it's easy money!" and all of a sudden, Emirates has realised a whole new income stream!

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  • PLATY

    PLATY

    14 Jun, 2013 02:18 pm

    Nicely put, sir!

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  • PLATY

    PLATY

    14 Jun, 2013 02:25 pm

    Not a good time for high end QF frequent flyers given the imminent status bonus changes!

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  • KG

    KG

    14 Jun, 2013 02:42 pm

    It is a pitty they are changing the bonus structure indeed, but I can see the logic (and many with me) as the bonus is to encourage people to fly QF and not any OW airline.

    Now one could argue that QF hardly flies anywhere anymore, thus limiting your chances to use them and earn the bonus......(and booking a QF flight operated on EK metal incurs such a great premium, it is not worth it, you are better off booking EK in that case).

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  • PLATY

    PLATY

    14 Jun, 2013 03:03 pm

    Sure, KG, but seeing the logic in something from the airline's point of view doesn't lessen my own personal annoyance as a customer when they downgrade the benefit set - for example, it affects me substantially in choosing to fly on routes in OneWorld partner AA on routes I cannot buy with a QF fly number even if I wanted to, which rather undermines the core of your argument (that QF has an extensive nextwork, when actually it hasn't!). Anyway, this topic exhaustively discussed on the other thread!

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  • KG

    KG

    14 Jun, 2013 03:21 pm

    I did not argue QF has an extensive network, but it's partners! And indeed, codeshare is very much focussed on their partnership with EK rather than any of the other OW airlines, thus I can see your annoyance.

    On the whole I think that all airlines are clamping back on perks, earn rates are lower, burn rates are higher, award seats more difficult to come by and surcharges on "free" flights on points are rising, it is not only a QF / EK issue.

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  • PLATY

    PLATY

    14 Jun, 2013 04:09 pm

    Absolutely, KG, but, it does not lessen the fact that customers are disadvantaged since the benefit set is continually eroded. QF is out of step with VA on the fuel surcharge issue, and also, with AA  for that matter...

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  • KG

    KG

    14 Jun, 2013 04:41 pm

    Yes, very true, but let's not start with AA, their redemptions are fenomenal, both in mileage costs as (lack of) surcharges. UA and US also have a generous program for that matter and even AS. To that respect we are definitely disadvantage Down Under (and I am even keeping the credit card sign up bonusses and churning of cards aside!!)

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  • PLATY

    PLATY

    14 Jun, 2013 08:41 pm

    Even redeeming QF points on AAflights - it comes up with $5 charge and you blink at the screen....!

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  • TheRealBabushka

    TheRealBabushka

    15 Jun, 2013 08:46 pm

    So I'm being devil's advocate: What's actually stopping the switch to AA guys?

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  • KG

    KG

    16 Jun, 2013 01:11 am

    The lack of being able to fly AA and thus earn bonus mileage counting towards status, the fact that most mileage in the US is earned via credit card churn, in Australia I can earn QF points with a local card, there is no option to earn AA mileage with any card (as I am not an US citizen). QF Platinum status is easier to come by in Australia than the equivalent AA Ex Plat.  Award availability is much better when in Australia and being a QF FF, AA members are "disadvantaged" in that way. Although Ii must admit that CX normally has good availability on both programs. Number one reason would be that you need to earn significant mileage to redeem awards, something I would never earn on flying alone. 

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  • ryanbingham

    ryanbingham

    21 Jun, 2013 09:07 pm

    i always felt Qantas has a mentality of 'ripping as much as they can from customers'. there seem to be no concept of 'value' for customers flying on qantas, its take all give nothing where it come to revenue taking. whereas emirates and others alike have a menality of being as price sensitive as possible. eg: "Emirates will reduce the base fare accordingly, from $1,872 to $1,562 in that example, so that commercial ticket prices "will remain relatively unchanged", according to an Emirates spokesperson."

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