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Oneworld’s Cathay Pacific has almost completely eliminated fuel and carrier surcharges from both commercial airfares and award bookings. This includes Asia Miles awards and Classic Flight Reward bookings made using Qantas points, where carrier charges are no longer payable at all.
The only exception is journeys originating in Japan, where a small fuel surcharge is still levied. However, the fuel surcharge amount on these routes is still quite reasonable, with the exact rates published on the Cathay Pacific website. For example, flights between Japan and Hong Kong attract a fuel surcharge of JPY2,000 (~$29) per flight sector. This is charged regardless of class of travel or fare type, but only on tickets where Japan is the point of origin (i.e. the first flight on the ticket departs from an airport in Japan).
When redeeming Qantas Frequent Flyer points for flights, the amount of carrier charges payable (which are in addition to genuine government taxes & airport charges, and need to be paid in alongside the points) depends on the operating airline. Award flights on airlines such as American Airlines, Fiji Airways, LATAM Airlines, S7 Airlines – and now also Cathay Pacific – attract no carrier or fuel surcharges at all. On the other hand, flights operated by partner airlines including British Airways, Qatar Airways, Royal Jordanian or Emirates have high carrier charges.
As an example, you could now expect to pay 159,000 Qantas points and $164.08 in taxes & charges for a one-way Cathay Pacific Business class redemption from Sydney to New York via Hong Kong. By comparison, you would need to pay 144,600 Qantas points + $484.38 to fly Qantas Business class from Sydney to New York via Los Angeles. Why the difference? The Qantas flight includes $357 in Qantas-imposed carrier charges.
Closer to home, Qantas removed fuel surcharges in July 2015, with the surcharges instead being absorbed into the fare for revenue bookings. (The botched implementation of this particular change resulted in some incredible Qantas error fares being available for a short time on 1 July 2015.) However, at the same time, Qantas introduced “carrier charges” on frequent flyer redemption bookings which amounted to up to $1,080 per round-trip booking. These carrier charges were reduced in the Qantas Frequent Flyer changes of 2019, but are still as high as $700 per return flight.
Meanwhile, Velocity Frequent Flyer introduced carrier charges on Virgin Australia reward flights for the first time in 2019. These charges were then increased at the start of 2020. When redeeming Velocity points for a Virgin Australia flight, carrier charges that are in some cases even higher than Qantas’ fees are now payable.
Fuel surcharges became a normal part of the airline industry when oil prices skyrocketed in 2004. Nowadays, they have almost nothing to do with the price of fuel.
Airlines generally like fuel or carrier surcharges because they don’t have to pay commission to travel agents on airfare components that are not part of the base fare. (That way, they also avoid paying commission on airport charges and government taxes.) By levying carrier charges on award bookings, airlines can also make some extra revenue when frequent flyers redeem their points for a flight.
But with Cathay Pacific currently fighting for survival as it operates just 4% of its normal capacity, and fuel prices at record lows, the airline is now doing everything it can to stimulate bookings. This change will make Cathay Pacific award flights more attractive, while also incentivising more travel agents to recommend Cathay Pacific.
Join the discussion on the Australian Frequent Flyer forum: CX removing fuel surcharges
