Deconstructing airport taxes & the games airlines play

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 :) 

Spooky corridor music and reason code 9110

The time since we left India has been a blur. Jet lagged and sleep deprived, we were thumped wide awake but only for an hour or 2 by the waters at Niagara falls on the hurricane deck today. More on that later as i try and recap the days since we left home.

13th Aug

The flight on Qatar Airways was much better than I expected except for the quality of ground service at both the Delhi & Doha airport. It took us close to 75 min to check-in at Delhi and the queues at the security check-in for transfer flights were something else as close to 4-5 flights from across Asia had landed almost simultaneously. Thankfully Pooja had fully exhausted her "Aaap Qatar mein hain" jokes in Delhi so i did not have to go through more of those in Doha. The whole lot of passengers were being literally herded through the single X-ray machine that was completely inadequate for close to 700-800 passengers. We were among the lucky ones who had a flight in the next hour or so and were accompanied by the airport ground staff through the security.

Almost 24 hours after leaving home we landed at JFK and came through immigration & baggage collection quite smoothly unlike a certain famous Khan whose ordeal i read about today. I will try and refrain from tempting fate by commenting about the pig-headedness of officials at airports in the name of security. We took the air-train from JFK and reached Crowne Plaza Times Square by 6ish in the evening. We were looking forward to a nice comfortable bed and a few hours of interrupted sleep when we entered our room 2523.

As i switched on the TV while Pooja freshened up i heard an exclamation from the bath commenting on the fact that the previous occupants of the room had left their toiletries in the bathroom. As we explored the room further we found the cupboard was full of clothes and all drawers were full of personal belongings. An empty envelope marked dollars and a post it with the telephone number of someone called Choudhary was in one of the drawers with close to 8-10 expensive looking women handbags. What was surprising was that the room had been cleaned by room service and entered in the system to be allotted to a guest. We called the front desk and as they sent someone to clean up the room Pooja and I decided to move to the corridor outside to avoid the situation of being confronted by the original "occupants" of the room.

Outside in the corridor we were confronted by the shadiest possible B grade Hindi horror music soundtrack (will upload by next post) and that was enough to send us convulsing with laughter and uncontrollable giggles. That was the condition that the housekeeping lady found us in and as we re-entered the room she found the situation inside equally hilarious as she called security to clear the room. Till security arrived she spent an entertaining 10 minutes discussing with Pooja the quality and style of the handbags in the drawers and the ones she should carry home that evening in case they remained unclaimed.

Anyway as we went back to the front desk to be assigned another room we cribbed royally about having to lug our 30 kg backpacks (combined) up and down 25 floors to the hotel staff and were rewarded with a coupon that entitled us to one of a free movie, buffet breakfast or free drink at the hotel due to reason code 9110. The hotel manager told us that code 9110 is a fact of life in hotels in the US since they started quick check outs where guests don't physically need to check out at the front desk and all front desk employees keep a stash of these coupons to handle irate guests. Do remember to ask for these if you end up in such a situation. The buffet breakfast next morning at the restaurant with a fabulous view of Broadway was a great way to start a day of sightseeing in New York City :)