Have you ever wondered why some award tickets to Europe cost so much money on top of the miles you have to redeem? There are 2 possible reasons for this:
- Foreign taxes and fees. Some European cities have higher airport/government taxes and fees than the rest of the world
- Fuel Surcharges. Also known as carrier charges
I’ll explain these fees and how you may be able to save some cash. There is so much information that I think it’s going to be impossible to do a blanket post on taxes, fees, and fuel surcharges. I want to cover all important details within each airline program, so it makes more sense to focus on a few frequent flyer programs at a time rather than trying to make one comprehensive post.
In this post, I’ll discuss taxes, fees, and fuel surcharges associated with award tickets to Europe booked with the frequent flyer programs of British Airways and Iberia. This includes flights operated by American Airlines.
Here is the TL;DR version of this post:
- If your total fees are more than $200, they are probably fuel surcharges.
- Avoid flying home from London on award tickets.
- Avoid British Airways operated flights for award tickets to and from Europe.
- Do not use the frequent flyer program of British Airways to book flights to and from Europe operated by Iberia, American Airlines, or any other partner that flies to Europe.
- When possible, use Iberia to book flights operated by Iberia.
- Consider flying to and from Madrid even if Madrid isn’t your European destination.
- If you’re set on flying American Airlines, collect Amex Membership Rewards points. They transfer to Etihad. Chase Ultimate Rewards points do not. You can use Etihad miles to book flights to Europe at better redemption rates than the AAdvantage program! Etihad does not collect fuel surcharges on award flights operated by American Airlines.
Keep reading and I’ll explain all of the above. Here are a few important facts before we get started:
Both of these programs are in the Oneworld alliance. You can use Iberia to book British Airways flights and vice versa.
You can transfer points from my two favorite credit card rewards programs, Chase Ultimate Rewards or American Express Membership Rewards, to British Airways or Iberia at a 1:1 ratio.
British Airways and Iberia are the only Chase Ultimate Rewards transfer partners that you can use book American Airlines/Oneworld flights. Amex has 2 additional partners that can book American Airlines flights to Europe.
The main hub for British Airways is London. Iberia’s main hub is Madrid.
Oneworld partners
In addition to award flights operated by British Airways and Iberia, you can use both programs to book flights on partner airlines. You can book flights operated by Oneworld partner airlines such as American Airlines, Cathay Pacific, LATAM, and several others.
Click here for award charts on redemptions using British Airways or Iberia Avios.
Foreign taxes and fees on British Airways and Iberia award flights between the US and Europe
Anytime you book an airline award ticket, you are going to have to pay taxes and fees in additions to the miles, points, or Avios (the name for the award currency of British Airways and Iberia) required. For reference, taxes and fees on US carriers for flights within the US are usually only $5.60 each way.
If you have an international itinerary, you’ll see higher fees. It’s usually the return flight that adds the fees. When you fly from a foreign airport back to the US, that foreign government may collect airport fees, government fees, transportation fees, tourism fees, or other fees and taxes. Every country has different costs.
These taxes and fees are not exclusive to British Airways or Iberia. They are mandated by foreign governments and they are going to be the same regardless of the airline program you use to book the award ticket. The only thing that may make a difference is the class of service. Sometimes business and first class seats are going to cost more than economy seats, but the difference usually isn’t more than about $100.
How much are we talking?
Usually these fees are very reasonable, so they aren’t a deal breaker. Here are some cities that are generally less than $100 in total taxes and fees:
- Amsterdam
- Barcelona
- Copenhagen
- Dublin
- Madrid
- Oslo
- Lisbon
- Milan
- Paris
- Rome
- Venice
Some European cities come with steep fees, though. One of the worst offenders is London. LHR has the highest taxes in the world.
This is an American Airlines flight (one-way from London to DFW in economy). The prices you see are the taxes and fees collected if you were to book an American Airlines flight through AAdvantage. AAdvantage does not have fuel surcharges on its own flights to and from Europe, the cost you see are those mandatory taxes and fees. No matter what airline program you use to book this AA flight, you will have to pay $175 in taxes and fees. If you look at the last two items, you can see that a large chunk is due to UK charges. Some airports in the UK are slightly less than LHR, but not much.
In addition to these unavoidable taxes and fees, certain programs add fuel surcharges. This can be a deal-breaker.
What are fuel surcharges?
The bane of my existence!
These are fees that are added to an award ticket on top of the mandatory taxes and fees. When you see the total fees topping $200 for economy or $300 for business/first, it’s probably because fuel surcharges are being collected.
- Contrary to the name, fuel surcharges on British Airways flights don’t seem to go up or down when oil prices go up or down.
- You usually do not need to worry about these fees if your flight is operated by American Airlines wholly within the US.
- Not all airline programs collect fuel surcharges. Some only collect fuel surcharges on certain partners and routes. Some countries have laws against fuel surcharges. For example, Brazil has banned any airline from adding fuel surcharges leaving the country.
- Sometimes this is also known as a “carrier fee” or “carrier charge”.
British Airways is notorious for fuel surcharges on transatlantic routes (US-Europe or Europe-US). Iberia also collects fuel surcharges, but sometimes they are significantly more reasonable than British Airways.
I love British Airways Executive Club (their frequent flyer program) for many routes. US to Europe is not one of them. In general, using British Airways Avios to book US to Europe should be avoided when possible. This includes partner flights.
British Airways has 2 things working against it
Have you ever tried to book an award flight to Europe with American Airlines AAdvantage miles only to see that the fees are $400 or more? That’s most likely because the flight is operated by British Airways.
- British Airways collects fuel surcharges for transatlantic flights on flights operated by British Airways and by partners. Also, if you use a partner such as American Airlines to book a flight operated by British Airways, you will still have to pay fuel surcharges. I’ll discuss that more a little later.
- London is notorious for airport fees and taxes. British Airways flights between the US and Europe connect through London even if London isn’t your destination. When London is involved, your fees are going to be higher.
How much are the fuel surcharges on British Airways award tickets?
Hundreds. A roundtrip economy ticket from London to Chicago on a British Airways flight has ~$370 in fuel surcharges. Roundtrip premium class seats usually top $1,000 in fuel surcharges.
Carrier imposed fees are the fuel surcharges. Other contributors to this high fee include UK’s Air Passenger Duty ($102.20) and Passenger Service Charte ($59.10). These are two of the mandatory taxes and fees that you will pay no matter what airline operates your flight.
Fuel surcharges may be the difference between a good redemption and a bad redemption
This is a roundtrip flight between Chicago and London operated by British Airways. The distance between Chicago and London is just under 4,000 miles, so the flight prices at 13,000/20,000 Avios (off-peak/peak)each way, or 26,000/40,000 roundtrip.
The particular dates I checked are priced off-peak, so the cost is 26,000 Avios roundtrip. This sounds like a steal considering British Airways flights between the US and Europe if booked with AA miles would be 45,000-60,000 AAdvantage miles. Of course there’s a catch though: fuel surcharges.
Fuel surcharges, taxes, and fees come to a total of $545. Considering the fact that paid flights to Europe often go on sale for sub-$500 (including fees), this is probably not going to be a good redemption value.
I checked the fare of those BA flights, and the roundtrip ticket was $834. So if you really wanted to figure out the value, you could subtract 545 from 834 which comes to 289. Are 26,000 points worth $289? To me, no. That’s around only 1 cent per point. In general, I try to get 2 or more cpp value when using Amex MR or Chase UR, which is what I would be using to transfer to BA to book this flight. My verdict: Not worth it
Business class award ticket fees on a British Airways operated flight from Chicago to London
The cpp value gets a little better with business class, but the fees are awful! Off-peak business class in this mileage range is 50,000 Avios each way or 100,000 roundtrip. 100,000 Avios for a roundtrip business class ticket between the US and Europe is good. The fees are not good.
Fuel surcharges alone are over $1,000 plus there are the other government taxes and fees. This brings your total to $1,454.
The cash price is about $4,686. Subtracting the $1454 for taxes, fees, and fuel surcharges, that leaves $3,232. Are 100,000 points worth $3,232? Well, its actually a value of over 3 cents per point which is an excellent value. I personally wouldn’t book this, because I would never pay for business class! But even with the ridiculous fees, its not a terrible value if you really want to fly business class.
Fuel Surcharges using Iberia instead of British Airways
Using British Airways Executive Club to book flights between the US and Europe are going to have high fuel surcharges no matter what airline operates the flight. But what about using Iberia or another partner program to book flights operated by British Airways? It doesn’t really get any better, unfortunately.
This is a one-way from Chicago to London. Distance is ~3,964 miles. The date I selected for this example is not a British Airways off-peak date, so it is priced at the normal 3,001-4,000 range which is 20,000 Avios each way.
Using British Airways Avios to book a flight operated by British Airways:
Using Iberia Avios to book the same flight operated by British Airways:
- British Airways: 20,000 Avios plus ~$188 in taxes, fees, and surcharges/carrier fees
- Iberia: 20,000 Avios plus ~$170 in taxes, fees, and surcharges/carrier fees
Iberia is a little better, but only by about $20.
For award flights to Europe, try to find routes operated by Iberia or American Airlines
Iberia collects fuel surcharges on their own flights and on flights operated by partner airlines, but some are significantly more reasonable than British Airways flights or partner flights booked with British Airways Avios.
Iberia operated flights
Iberia has nonstop flights to Madrid from these US cities (some may be seasonal and/or not daily):
- Boston
- Chicago
- Los Angeles
- Miami
- Philadelphia
- San Francisco
Iberia has a large network in Europe, so even if Madrid is not your destination, you can add a connection. If a connecting flight isn’t available and/or makes the redemption cost too high, you can buy a cheap intra Europe flight to your destination. Or take a train.
JFK-MAD roundtrip operated by Iberia, booked with Iberia Avios
Total: 34,000 Avios plus $185 in taxes, fees, and carrier charges.
The cash value of this flight is ~$613.
If you subtract the fees, that leaves about $428. Are 34,000 Avios worth $428? I would say no because this is only about 1.25 cents per point value. This happens to be a decently priced fare, but when cash fares are higher, an award ticket to Europe using Iberia could potentially be a good value even with $185 in fees.
What about using British Airways Avios when the flight is operated by Iberia?
JFK-MAD roundtrip operated by Iberia, booked with British Airways Avios
British Airways collects more than double the amount Iberia does for the exact same Iberia-operated flight. You would definitely want to use Iberia in this scenario (or pay cash). Either way, don’t use British Airways.
- Using Iberia: 34,000 Avios plus ~$185
- Using British Airways: 34,000 Avios plus $413
What about using British Airways or Iberia Avios to book flights operated by other partners?
You can use British Airways or Iberia Avios to book American Airlines flights. In fact, I do this all the time. But US to Europe may not be the time to use Avios, even if the flight is operated by American Airlines.
British Airways and Iberia collect fuel surcharges on partner flights to Europe, including flights operated by American Airlines. This is really annoying, especially since American Airlines AAdvantage doesn’t even collect fuel surcharges on their own flights!
Some partner flights are reasonable with Iberia, but not British Airways
This is a roundtrip flight operated by American Airlines from JFK to Madrid. I’ll compare prices between AAdvantage, British Airways Executive Club, and Iberia Plus. Keep in mind that when booking American Airlines flights with Iberia’s program, you can only book roundtrip.
British Airways and Iberia calculate mileage to determine redemption cost differently on AA and partner operated flights. Click here for more info.
American Airlines AAdvantage
I am just using this to compare so you can see how much more the fees are if booking with BA or IB. You cannot transfer Avios to AAdvantage. You can only use Avios to book AA operated flights by booking through British Airways or Iberia, so you’re subject to the policies and fees of BA or IB.
60,000 miles and $51.83. Very reasonable fees, but more miles than using BA or IB. Note that AA US to Europe roundtrip is 45,000 AAdvantage miles if you can find off peak dates. Remember, their off peak dates will be different than BA and IB.
British Airways Executive Club
40,000 Avios plus $413. Good Avios redemption IF there were no fees, but the extra fees mean the cash fare would need to be pretty high to make this a good value. If you’re even considering a redemption like this, always check Iberia because fees may be better.
Iberia Plus
42,000 Avios plus $103. Good Avios redemption (only 2,000 more than with BA), and reasonable taxes, fees, and fuel surcharge. The cash fare would have to be ~$950 to get a 2 cpp value after factoring in the $103 in fees. But if I was between British Airways and Iberia for this redemption, I’d rather redeem the extra 2,000 Avios and pay $300 less in fees.
Here is the breakdown of carrier fees from Iberia:
The surcharge is only about $46! The rest of the fees are those unavoidable government taxes and fees.
Other American Airlines flights seem to increase fees if you use Iberia to book
This route is New Orleans to Rome with one connection each way, and all segments are operated by American Airlines.
- MSY-PHL-FCO
- FCO-CLT-MSY
New Orleans to Rome operated by American Airlines booked with British Airways
I would expect this from BA since we know they add outrageous surcharges to transatlantic flights operated American Airlines.
New Orleans to Rome operated by American Airlines booked with Iberia
$320 in surcharges?! Remember, there were less than $50 in surcharges using Iberia Avios to book the JFK-MAD operated by American Airlines.
- British Airways: 65,000 Avios and $445
- Iberia: 65,050 and $408 (sidenote: I’m confused because there is no 65,050 tier. I think this is supposed to be 65,000 Avios)
Iberia is slightly cheaper, so given the choice I’d go with Iberia. But $400 for taxes, fees, and surcharges is more than I care to pay for an economy award ticket.
DFW to Amsterdam on a flight operated by American Airlines booked with Iberia Avios
I wanted to see if nonstop routes other than Madrid have fees so I checked DFW to Amsterdam on a flight operated by American Airlines booked with Iberia.
Sure enough, that $320 operator charge is added.
Iberia and British Airways are great programs for other routes
There are no fuel surcharges on most other American Airlines routes when using Avios. For instance, you can use British Airways Avios to book flights from the US to South America operated by American Airlines and there are no fuel surcharges. Flights wholly within the US operated by AA also have no fuel surcharges.
British Airways and Iberia have a unique partnership with each other
These airlines are under the same parent company*. There are certain conditions that apply, but you can actually transfer Avios between the 2 airline programs.
This isn’t really relevant if you’re transferring from Amex or Chase since you can transfer Membership Rewards or Ultimate Rewards to either of the programs. It is something that I wanted to point out, though.
I want to reiterate that this is not the norm. Usually you cannot transfer airline currencies to other airlines, including partners. Instead, you can use one program’s currency to book an award flight operated by a partner airline.
- You cannot transfer British Airways Avios or Iberia Avios to American Airlines AAdvantage miles.
- You can use British Airways Avios or Iberia Avios to book an American Airlines flight.
- Your redemption cost is determined by the program you use to book (British Airways Executive Club or Iberia) not American Airlines AAdvantage
Like I pointed out in another post, sometimes it makes more sense to use Iberia than British Airways. If for some reason you transfer Amex or Chase points to British Airways then realize Iberia results in a lower redemption cost, you cannot transfer Avios from British Airways back to Amex or Chase. You can transfer them to Iberia, though. This shouldn’t be an issue since I never recommend transferring before confirming price and availability!
*Aer Lingus, an Irish airline, is also under the parent company. As a result, you can transfer Avios between British Airways, Iberia, and Aer Lingus. Aer Lingus is NOT in the Oneworld alliance, so you cannot use Aer Lingus Avios to book AA flights. But you can transfer Aer Lingus Avios to Iberia or British Airways, then use those programs to book American Airlines flights. Other than flights on Aer Lingus operated flights, I haven’t found many scenarios where using Aer Lingus is better than Iberia or British Airways.
Even if Madrid isn’t your destination, you may want to consider making it your ‘gateway’ flight to and from Europe
Using the frequent flyer programs of Iberia or British Airways to book flights to Europe means you are going to have to pay fuel surcharges. These surcharges can add hundreds to an award ticket. British Airways is ridiculous for their own flights and partner flights, but using Iberia to book Iberia or American Airlines flights is more reasonable.
The best options I’ve seen are on flights operated by American Airlines to Madrid, booked with Iberia Avios. The carrier/operator/fuel surcharges are less than $50. Factoring in unavoidable government taxes and fees, the total is around $100 roundtrip for an economy seat.
I said this earlier but I’m going to say it again. Even if Madrid is not your destination, you can add a connection. Iberia has a large network throughout Europe and adding a connecting flight is as low as 4500 Avios each way. If connecting flight isn’t available and/or makes the redemption cost too high, you can buy a cheap intra Europe flight to your destination. Or take a train. It is very easy to travel between European cities.
Remember, a city further west in the US will add more Avios required for your flight to Madrid due to Iberia’s distance-based pricing. DFW to Madrid is 65,000 Avios roundtrip, while JFK to Madrid is only 42,000 roundtrip.
Final Thoughts
Avoid flying home from London on award tickets. LHR has the worst fees in the world regardless of the airline you use to book your award flight.
You can’t really get around government taxes and fees without changing your departure city, but you can avoid ridiculous fuel surcharges/carrier charges/operator charges:
- Avoid British Airways operated flights for award tickets to Europe. This includes tickets booked with partner programs such as AAdvantage and Iberia
- You can use British Airways Avios to book partner award flights to Europe, but fees are just as bad as their own flights. Again, just avoid British Airways.
- Use Iberia to book Iberia flights if possible
- Use Iberia to book American Airlines flights if fees are reasonable
The common denominator here is British Airways. Avoid British Airways when booking flights to Europe if possible!
Heres another big tip: Etihad does not collect fuel surcharges on award flights operated by American Airlines. If you can find American Airlines flights to Europe, use Etihad to book! You can read more about that here. You cannot transfer Chase Ultimate Rewards to Etihad but you can transfer Amex Membership Rewards to Etihad!
How to distinguish taxes and fees from fuel surcharges: If your total fees are more than $200, they are probably fuel surcharges. On Iberia’s website, you can see a breakdown of the fees after you click through as though you are going to make the reservation. Almost anything not labeled as “carrier charges” or “operator charges” are the taxes and fees that are unavoidable.
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