I will use this as the last post to highlight tips to maximize the cost savings before describing our actual itinerary on this trip starting with Rio de Janeiro in the next post. This post is more relevant if you like to redeem your miles for international trips, the entire logic does not hold for domestic redemptions as both Kingfisher & Jet just charge the vanilla airport tax for redemption.
In my last post I calculated the cost saving/mile from frequent flyer miles as:
(Cost of flight – taxes)/miles required to redeem
Once the destination has been finalized, the variables that can be played around with are the miles required (if you have multiple FF programs with adequate miles) and one would obviously choose by the program with lesser number of miles required to redeem the award ticket. The other variable which can lead to substantial cost savings is Airport tax.
The magic password to this savings is something called YQ. I will not get into details or technical explanations of the components of airport tax but at a very high level the airlines follow 2 policies of defining airport taxes:
1) Considering fuel surcharge (YQ) as a part of airport tax: Technically while buying the ticket you would see 2 components, the fare + airport taxes & other surcharges. Remember all those campaigns about fare specials to London on British Airways for Rs 19,990 + tax which never ended up being available for an all inclusive fare of less than Rs 30k. Well approx Rs 11k was the airport tax+fuel surcharge. They then increased the fuel surcharge and reduced fare such that the airport taxes were coming to in excess of Rs 19k and the base fare dropped to about Rs 10k. So while the overall cost of the cheapest ticket remained approx Rs 30k British Airways went to town claiming never before heard fare of Rs 9990 return from Delhi to London.
2) Fuel surcharge is considered to be a part of the fare and the airport taxes are the vanilla airport taxes: These would still vary by destination but as a ballpark Europe/US/Australia airport taxes would not be in excess of Rs 7k (except for good old Heathrow in London in which case it will be closer to Rs 10k) and the rest of the world (SE Asia, Africa, South America) should not exceed Rs 5k.
Both Kingfisher & Jet Airways fall in bracket 1 and club fuel surcharge as part of tax for their international operations. This makes redeeming Kingclub/Jetprivilege miles on international sectors like Bangkok/London not great value. However the positive thing about Jetprivilege & Kingclub is that they have multiple partners that have extensive routes of their own which typically gives one a chance to find a partner that falls in bucket 2 and does not consider YQ to be a part of taxes.
No airline would redeem a partner flight on a sector that they themselves fly on. So forget about redeeming a ticket to London or Bangkok using a partner that flies that route. The trick is to find an alternate destination that would anyway fall on your itinerary but is not serviced Jet/Kingfisher. So if you are planning a vacation in London/Scotland explore starting your trip from Edinburgh/Manchester and fly either Emirates or Etihad (both these airlines fall in bracket 2) using your Jet miles.
To add to the complication airlines can fall into both categories. For example South African airways charges fuel surcharge as airport tax if you redeem miles on their own frequent flyer program but the nature of their partner agreement with Jet Airways is such that they don’t charge the fuel surcharge as part of taxes. I flew on South African airways a few times during my previous project in Johannesburg and had I collected my miles in South African airways and used those to redeem a ticket from Johannesburg to Sao Paolo I would have had to pay 58200 miles + approx Rs 15k in taxes but the nature of their agreement with Jet Airways is such that for 24500 miles + Rs 1850 I got the same return ticket.
Another example of such an airline is Qatar Airways which charges fuel surcharge for reward booking on its own frequent flyer program but don’t charge YQ if the ticket is booked using Kingmiles.
Most customer facing agents at the Kingclub/Jetprivilege call centers are also ignorant about these rules so ask them to check from the international partner redemption desk about these rules. When I start planning a trip I first figure out the entire list of cities on my itinerary that are serviced by the airlines whose frequent flyer miles I plan to use and all their partners. Usually there are multiple airlines that can be used especially if you are flying to Europe/USA. I place a partner request and specifically ask the agent to find out from the international partner redemption desk about the partner airlines that are on my shortlist but DON’T charge YQ as part of tax. Once I know the airlines I want to use, I work backwards to see the destinations I can fly to on my itinerary using those airlines and start checking for dates with award availability.
While using Kingclub & Jetprivilege miles the following airlines don’t charge YQ: Emirates, Etihad Airways, Qatar Airways, South African Airways, Delta (for international flights from US, not sure about US domestic), Gulf Air, Kenya Airways. This is not the full list and these agreements keep on changing so check with the customer care with the most updated situation when you start planning your trip.
Nett nett you need to invest time behind figuring out the YQ equation for your trip but if you invest that time and are flexible with where you start and end your trip on a multi destination itinerary, for most destinations you would be able to figure out a airline that doesn’t charge YQ and save you a reasonable amount on airport taxes.. that are not taxes in the first place :)
PS: There are a lot more tips regarding usage of frequent flyer miles that i can write about, specifically the tools that will help you find award seats to redeem, selecting the right frequent flyer program and other award rdemption bargains. If you would like me to blog about those topics let me know, otherwsie i will start with the detailed travel itinerary covering Rio, Torres del Paine National Park, Easter Island, Buenos Aires, & Iguazu Falls.
PPS: Any comments regarding feedback on the blog and the usefulness of the tips will be much appreciated :)
In my last post I calculated the cost saving/mile from frequent flyer miles as:
(Cost of flight – taxes)/miles required to redeem
Once the destination has been finalized, the variables that can be played around with are the miles required (if you have multiple FF programs with adequate miles) and one would obviously choose by the program with lesser number of miles required to redeem the award ticket. The other variable which can lead to substantial cost savings is Airport tax.
The magic password to this savings is something called YQ. I will not get into details or technical explanations of the components of airport tax but at a very high level the airlines follow 2 policies of defining airport taxes:
1) Considering fuel surcharge (YQ) as a part of airport tax: Technically while buying the ticket you would see 2 components, the fare + airport taxes & other surcharges. Remember all those campaigns about fare specials to London on British Airways for Rs 19,990 + tax which never ended up being available for an all inclusive fare of less than Rs 30k. Well approx Rs 11k was the airport tax+fuel surcharge. They then increased the fuel surcharge and reduced fare such that the airport taxes were coming to in excess of Rs 19k and the base fare dropped to about Rs 10k. So while the overall cost of the cheapest ticket remained approx Rs 30k British Airways went to town claiming never before heard fare of Rs 9990 return from Delhi to London.
2) Fuel surcharge is considered to be a part of the fare and the airport taxes are the vanilla airport taxes: These would still vary by destination but as a ballpark Europe/US/Australia airport taxes would not be in excess of Rs 7k (except for good old Heathrow in London in which case it will be closer to Rs 10k) and the rest of the world (SE Asia, Africa, South America) should not exceed Rs 5k.
Both Kingfisher & Jet Airways fall in bracket 1 and club fuel surcharge as part of tax for their international operations. This makes redeeming Kingclub/Jetprivilege miles on international sectors like Bangkok/London not great value. However the positive thing about Jetprivilege & Kingclub is that they have multiple partners that have extensive routes of their own which typically gives one a chance to find a partner that falls in bucket 2 and does not consider YQ to be a part of taxes.
No airline would redeem a partner flight on a sector that they themselves fly on. So forget about redeeming a ticket to London or Bangkok using a partner that flies that route. The trick is to find an alternate destination that would anyway fall on your itinerary but is not serviced Jet/Kingfisher. So if you are planning a vacation in London/Scotland explore starting your trip from Edinburgh/Manchester and fly either Emirates or Etihad (both these airlines fall in bracket 2) using your Jet miles.
To add to the complication airlines can fall into both categories. For example South African airways charges fuel surcharge as airport tax if you redeem miles on their own frequent flyer program but the nature of their partner agreement with Jet Airways is such that they don’t charge the fuel surcharge as part of taxes. I flew on South African airways a few times during my previous project in Johannesburg and had I collected my miles in South African airways and used those to redeem a ticket from Johannesburg to Sao Paolo I would have had to pay 58200 miles + approx Rs 15k in taxes but the nature of their agreement with Jet Airways is such that for 24500 miles + Rs 1850 I got the same return ticket.
Another example of such an airline is Qatar Airways which charges fuel surcharge for reward booking on its own frequent flyer program but don’t charge YQ if the ticket is booked using Kingmiles.
Most customer facing agents at the Kingclub/Jetprivilege call centers are also ignorant about these rules so ask them to check from the international partner redemption desk about these rules. When I start planning a trip I first figure out the entire list of cities on my itinerary that are serviced by the airlines whose frequent flyer miles I plan to use and all their partners. Usually there are multiple airlines that can be used especially if you are flying to Europe/USA. I place a partner request and specifically ask the agent to find out from the international partner redemption desk about the partner airlines that are on my shortlist but DON’T charge YQ as part of tax. Once I know the airlines I want to use, I work backwards to see the destinations I can fly to on my itinerary using those airlines and start checking for dates with award availability.
While using Kingclub & Jetprivilege miles the following airlines don’t charge YQ: Emirates, Etihad Airways, Qatar Airways, South African Airways, Delta (for international flights from US, not sure about US domestic), Gulf Air, Kenya Airways. This is not the full list and these agreements keep on changing so check with the customer care with the most updated situation when you start planning your trip.
Nett nett you need to invest time behind figuring out the YQ equation for your trip but if you invest that time and are flexible with where you start and end your trip on a multi destination itinerary, for most destinations you would be able to figure out a airline that doesn’t charge YQ and save you a reasonable amount on airport taxes.. that are not taxes in the first place :)
PS: There are a lot more tips regarding usage of frequent flyer miles that i can write about, specifically the tools that will help you find award seats to redeem, selecting the right frequent flyer program and other award rdemption bargains. If you would like me to blog about those topics let me know, otherwsie i will start with the detailed travel itinerary covering Rio, Torres del Paine National Park, Easter Island, Buenos Aires, & Iguazu Falls.
PPS: Any comments regarding feedback on the blog and the usefulness of the tips will be much appreciated :)
U r too good licky.i think u shud open an industry called travel consultancy. This post is smthing else. Next time i go sm wr i will call u bfr planning the trip...
ReplyDeleteDude, Nice piece... give us some more gyan on frequent flyer miles and travel hacking.
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A taxi fare calculator is in the form of electronic gadget or a mobile application or a simple electronic taxi fare estimator. Everyone is known to expect the rates to pay what the driver demands. This electronic device has programmed brain to repeat what it has been programmed to do. Especially one has to arrive from a distant place in the city with little knowledge except trust on law and man.
ReplyDeleteIt always feels to have a taxi fare calculator to help individuals. The authority's issues conversion tables with every notification of rise in fares
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A taxi fare calculator is in the form of electronic gadget or a mobile application or a simple electronic taxi fare estimator. Everyone is known to expect the rates to pay what the driver demands. This electronic device has programmed brain to repeat what it has been programmed to do. Especially one has to arrive from a distant place in the city with little knowledge except trust on law and man.It always feels to have a taxi fare calculator to help individuals. The authority's issues conversion tables with every notification of rise in fares.
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