Hefty charges fuelling angst

High taxes and fees on frequent flyer seats are causing angst among passengers, who have the national carrier foremost in their sights.

When I wrote earlier this month about the high levels of taxes and charges being added to air tickets, it unleashed a barrage of emails from frustrated travellers. Foremost in their sights was our national carrier and the greatest source of angst was being slugged with massive taxes and charges when booking frequent flyer reward seats.

One traveller reported being quoted $437 in taxes and charges on an international frequent flyer seat to Bali with Qantas when he could book a complete airfare for $569 - just $132 more. Another was quoted $479 in taxes and charges for a Qantas frequent flyer seat to Los Angeles and back when he could buy an all-inclusive fare on another airline for $1159.

"It is reasonable to note that the trip is still costing less than if I had to buy the tickets, but this matter of fees and charges is simply outrageous," he says.

Perhaps the most interesting example, although it relates to a paid ticket rather than a frequent flyer booking, is a traveller who was quoted $820 to take an infant - without a seat - from Sydney to Los Angeles and back.

Similar flights on Virgin Australia had infant charges amounting to $111 for the return journey.

When the traveller queried the $820 quote with Qantas, the airline wrote back saying the cost comprised 10 per cent of an adult fare (the standard charge for an infant travelling without a seat) with the balance being "taxes".

"It's actually not the first time I feel like I've been burnt by Qantas and their ridiculous charges relative to other carriers, but it's going to be the last," the traveller said.

The crux of the issue is the size of fuel surcharges being levied by Qantas and its decision to apply those to frequent flyer redemption seats as well as paid tickets.


Qantas has increased its fuel surcharges twice since the start of the year, with passengers now paying as much as $380 extra each way on flights to Britain and Europe.

Passengers booking standard frequent flyer flights within Australia now pay a $16 fuel surcharge, while flights to New Zealand attract a $30 surcharge.

The owner of popular internet forum the Australian Frequent Flyer, Clifford Reichlin, says charges on frequent flyer seats are always "a hot issue" on the forum.

Reichlin believes Qantas is devaluing its frequent flyer points by levying charges on those redeeming seats.

He recently booked a series of flights within the US with United Airlines frequent flyer points and yet he was charged only small amounts in taxes.

"Qantas really is being very unreasonable, I think," he says.

Reichlin's comments are reflected in the experience of a reader who was quoted more than $400 in taxes and charges for a frequent flyer booking with Qantas despite the fact he could book the same flights with United Airlines frequent flyer points and pay less than $100 in taxes.

Another reader noted that Qantas is not the only offender, with the Japanese airline JAL quoting about $900 in taxes and charges on a business class frequent flyer seat from Sydney to Paris. When he booked a business class seat to Paris using United Airlines points, he was offered a flight (operated by Qatar Airways) for about $200 in taxes and charges.

Many readers questioned the amount of the fuel surcharge being collected by Qantas, on both paid and frequent flyer seats.

An international airline captain provided detailed calculations of jet fuel usage for various routes flown by Qantas, comparing it to the average passenger load and the surcharges that they collected.

He believed Qantas was "profiting" from the fuel surcharge in almost every case. However, Qantas says its fuel surcharges do not "fully recover" the impact of high fuel prices.

A spokesman for Qantas, Tom Woodward, says the airline's fuel bill for 2011-12 was a record $4.4 billion, up from $3.6 billion the previous year.

"This is a major issue for all international airlines ... the use of fuel surcharges is widespread in the industry for this reason," he says.

Woodward says fuel surcharges apply to all passengers, including infants, as they are not calculated on passenger weight.

He says it is too "administratively complex" to incorporate charges and taxes into frequent flyer bookings for international seats.

"We recognise that this is a point of frustration and we do allow customers to use points for surcharges when booking domestic flights," he says.

Reichlin recommends that travellers booking domestic Qantas frequent flyer seats book under the "Any Seat" reward category, in which the fares include all taxes and charges.

While you might use more points, you avoid paying any cash component, he says.

So why does Qantas (along with other international airlines) separate the fuel surcharge from the rest of the fare, when fuel is clearly an operational cost?

The official answer is that having the surcharge helps to provide "a clear message that reflects the nature and size of fuel costs, whereas a wide range of factors influence the base fare".

A more cynical explanation could be that separating out the surcharge allows the airline to recoup some of the cost associated with providing frequent flyer seats.

Qantas was, until recently, also getting away with paying less commission to travel agents by structuring its fares this way.

The airline was paying travel agents commission on the base fare and not the fuel surcharge, but a group of agents won a long-running court battle over the issue.

The class action resulted in Qantas being ordered to back-pay commission for the fuel surcharge portion of airfares (to agents who were part of the class action) and was followed by a decision by Qantas to start paying commission on the full amount, surcharge included.

Make it right

Australian air travellers who feel they have received shoddy treatment now have an outlet for unresolved complaints, with the federal government's first "airline customer advocate", Julia Lines, taking up the role earlier this month.

The independent position is touted as a "real alternative" for travellers who are unable to resolve their complaint directly with the airline.

Lines was previously the manager of complaints assessments at the Health Care Complaints Commission, where she helped assess thousands of complaints each year.

The efficacy of this role, which is being jointly funded by Qantas, Virgin Australia, Jetstar, Regional Express and Tiger Airways, will only be shown through testing, so those with legitimate gripes should put their fingers to the keyboard.