American Express - Air-Miles Tax Deception

[Green]

I enrolled in my Amex air-miles program, changing my accumulated reward points into air-miles. Flying to Melbourne in two weeks, I checked with Royal Orchid plus about redeeming my air-miles to Melbourne, they told me how many i needed, we check flight time availability, I recalled Amex to top up my miles a few thousand baht to reach the required 55,000 mile points for flying to Melbourne from Bkk. Ok. So I go to book my flight with Royal Thai Orchid, and they tell me that I have to pay an extra 12,190.Baht in Tax, in addition to the 55,000. airmiles.

If I booked a regular flight to Melbourne from bkk, its about 27,000.Baht. So the tax I would be paying is nearly half the cost of a regular flight!

I called Amex back and asked them why I wasn't informed about this surcharge, and they told me, "You didn't ask". I asked to speak to a manager, I asked again why, if Amex knows this information, knows that there is a hidden cost that neither they nor the airline informs its customers about, why do they not add one extra sentence to inform the customer they we will have to pay an additional Tax charge. She said, "we assume the customer knows that." I asked how would I know that? Every flight I have ever booked has included the tax and fuel charge in the cost of the flight, so why, in this case do you assume that we would know that? She changed her answer and apologized and said, no we don't assume that. Then she went silent. Ok. So they realize they are at fault, and in this willing deception, are the cause of the problem. How do they deal with this. They blame the customer for "not asking", and reply that this is a condition of the airline which they have no control over, and so are in no way obliged to tell us about.

I was furious, and really let the manager have it, I asked to speak to a superior, she reply's that "they are on holiday, can they call you back tomorrow?". Excellent service, I have been a member for 13 years, never a problem, but in a single transaction they have destroyed my trust, please be warned. I will talk to the superior tomorrow, if they dare call, and I will press them for some form of compensation, I do wonder if they are over-stepping the legalities of their relation to American Express, in order to appease the airlines for accepting their air-miles system...anyways,

Feedback welcome...

[theoldgit]

Does seem about right, the taxes and fuel surcharges are in the region of 12,200 Baht to Melbourne, I'm not aware of any carrier that doesn't pass on the taxes and still impose a fuel surcharge for miles redemption flights.

To be fair to Amex it's hardly a deception, it's Thai who are imposing the extra charges not them.

[endure]

When I use Emirates miles to upgrade a flight in the UK I always have to pay the tax as an extra.

[Green]

Yes, my gripe is more about the fact that I was not informed by either Thai airways or Amex anything about additional charges while inquiring about the whole air-miles program before deciding to enroll. And it appears from their response that they have been instructed not to say anything about the tax charge. Of course not until the customer has been lured into the airmiles program with the idea of free flights...so if a TG flight to Melbourne is about 27K, and 12 of that is tax, then my 55,000.air-miles amounts to 15K baht essentially. How do they calculate 12K on top of that, that is some major tax. However, if I had known this, I would not have enrolled in air-miles, I would have bought the flight using my Amex, accumulated the reward points, and used them other wise. I feel ripped off, what can I say, with a "its not our problem" response from Amex, which is what makes me angry about this. How difficult would it have been for them to say "plus tax", for customers to make a fully informed decision?

[theoldgit]

I think you will find that most of the "tax" is the fuel surcharge.

[dundas]

I think the OP highights the fact that the days of frequent flyer schemes actually delivering what they promise (free flights!) are long gone. (The long defunct Ansett gave me a Mel-Syd business class return flight just for signing up to their frequent flyer scheme, with no cash payment required). What you typically get now for redeeming your miles is a discount on the cash fare and what I've noticed is that the discount is getting smaller.

For example, I worked out I would be better off keeping (not redeeming) my Qantas frequent flyer miles for a one way economy flight Bkk-Syd, because the Qantas additional charges were only marginally less than paying cash for a one way ticket on Scoot - even allowing that on Scoot I am paying extra for meals, baggage, and a seat with extra leg room.

I decided to save my Qantas miles for something where there is value - probably on a Biz class ticket. Typically with Qantas, I can't even use my points for a upgrade, long haul, because they make it too difficult, especially for lower tier levels.

And very few people like to boast about how what they promise isn't what you'll get. They're not going to shout it from the roof tops. It really is a case of "buyer beware."

[KHR1010]

Obviously you have not had much experience utilizing miles and it is a shame you did not read a bit on the website. Below is directly off the Thai Airways website. There are times and circumstances where using a miles ticket makes sense, and there are certainly times when it does not. If you fly economy, I cannot see it ever making much sense as the tickets are so inexpensive to begin with. I use 200K to 300K a year in miles tickets depending on my travel, for business class tickets it makes good sense.

Award Conditions

All applicable taxes and surcharges are the responsibility of the Award ticket holder.

[Green]

I enrolled with an agent over the phone, but you see not even the staff or manager knew enough to tell me over the phone when i complained that it is actually in their terms and conditions on the website; however, I believe my point still stands, that it is a con - because if they genuinely expect and require that their customer read what is on the site, then enrolling should be through the site, where we would then have to click a 'read terms and conditions' box to complete the contract. The way they have it set up is a con, and judging by their response, many others have discovered the same, but they continue to play it their way, the program is perhaps only advantageous for frequent fliers, and in business class, again questions they could quickly ask in order to advise customers appropriately. They certainly have always done so in regards to other inquiries I have made, its always a pleasure to receive good service from Amex agents, but in fact its all so very finely tweaked to work to their advantage, not ours.

Incidentally, they did not call back today, perhaps I should send them their own information so in the future they can really stick customers to the wall.

[lomatopo]

Yes, most likely YQ (fuel surcharge) along with passenger service fees. Some loyalty/affliliated/frequent flyer programs do not charge YQ.

Looks like 12,180 to me?

Edited November 14, 2012 by lomatopo

[tinfoilhat]

it would seem that deceptions are the new scam.

Anybody out there on air miles not know this?

[Familyonthemove]

I've found Amex and Thai to be a bit dissappinting. Amex 'AirMiles' are converted at a rate of 1.5 to 1 when you transfer them to your Thai account - that's just a simple deception as there's no reason why they could not be set a 1:1. Then Thai will only let you book a 'free' flight when they are sure they can't sell it to someone at full price - so you get waitlisted and have to phone and complain to get a seat.

With some effort the system does work - but it feels more like a chore than an incentive. Singapore Airlines is better - but with all the schemes you need to pay the tax.

[Green]

Yes it was 12,180B 'tax'...

[lomatopo]

I'm not aware of any carrier that doesn't pass on the taxes and still impose a fuel surcharge for miles redemption flights.

Several airlines' FFPs including United Airlines/MileagePlus do not add the YQ to award tickets, even on partner airlines. If I redeem UA miles for the TG, via a Star Alliance award, non-stops BKK-MRL-BKK I would pay, in USD:

BKK-MEL $22.80 + $16.40 = $ 39.20 (Thailand PSC - 700 baht, Australian PSC)

MEL-BKK $ 16.40 + $ 4.20 + $ 57.40 = $ 78.00 (Australian PSC, Australian Security, Australian Passenger Movement)

So $117.20 all in, ~ 3,600 THB. I would not be required to pay the YQ (fuel surcharges) fees.

Edited November 14, 2012 by lomatopo

[mikecwm]

I have booked several flights with EVA and Air Transat using RBC Avion points. The taxes are always your responsibility to pay - either with a charge to the credit card - or extra points deducted.

Sure it would be nice if the stated points covered everything and you really did get a "free" flight, but very little in life is fair is it?

The taxes with EVA are normally about 25% above the fare price, so still well worth getting the 75% off ticket price.

Life is about learning lessons and now you will know for the future.

Giving the person on the other end of the phone a hard time helps no one - they are just doing a job - probably for little more than minimum wage.

Live and Learn and move on.

[tolsti]

as the OP is green to FF points and their nuances I suggest he has a good read of Flyertalk.com where all FF points and miles programs are discussed, issues raised and questions answered.

[fire and ice]

Calling a fuel surcharge "tax" is outright dishonest - its not a tax as it goes 100% to the airline not any Government. However is it par for the course for most FF programs to charge you the tax+fuel surcharge for rewards bookings, Although some airlines fuel surcharges are insulting to the intelligence, whereas others are zero or close to it.

There is actually a good reason why fuel surcharges came into effect (relate dot the IATA pricing and how prices are set in advance etc and then cant be changed till next year etc) but there was only even an excuse to impose it the first year fuel skyrocketed and then not after this. Then they didn't impost a "fuel discount/rebate" once it got cheap again. Having said this, there shoudl not any ANY fuel surcharges anywhere as fuel has risen LESS than inflation over the past 20-35 years so its BULL%^$T when airlines claim fuel costs are rising too fast so therefore they have to impose a fuel surcharge.

[ozyjon]

I now find myself living in 3 continents year round, lucky for me i can follow the sun, i'm from Sydney and had a business where i ran all my payments through my Visa (qantas) miles card, when i travelled i used to pay for my flights hotels etc with my card, when i returned home i sat down and calculated the real cost of owning this card and all the associated costs and decided that the rewards weren't really there, i used up the thousands of points i accumilated on flights and cancelled my card but decided to replace my visa card with a no frills low maintenance card for a back up,, i now have bank accounts in the countries i live in and use the ATM card to make my purchases and payments, i hunt bargains for Hotels and Flights on the internet and found i save more than trying to use fequent flyers points, i calculated i would have to spend thousands of dollars just to get a short flight anywhere,, no it's not for me, i don't use credit cards for anything anymore rather use the airline reward cards instead, PS new credit cards and passports have a new chip embedded in them, scammers are seeing new scamming oportunities to steal from people, new wallets are being manufactured that have a silver foil lining to stop illegal access, BEWARE OF THIS NEW SCAM

[inapeartree]

I think you will find that most of the "tax" is the fuel surcharge.

True.

[lomatopo]

Calling a fuel surcharge "tax" is outright dishonest - its not a tax as it goes 100% to the airline not any Government. However is it par for the course for most FF programs to charge you the tax+fuel surcharge for rewards bookings, Although some airlines fuel surcharges are insulting to the intelligence, whereas others are zero or close to it.

There is actually a good reason why fuel surcharges came into effect (relate dot the IATA pricing and how prices are set in advance etc and then cant be changed till next year etc) but there was only even an excuse to impose it the first year fuel skyrocketed and then not after this. Then they didn't impost a "fuel discount/rebate" once it got cheap again. Having said this, there shoudl not any ANY fuel surcharges anywhere as fuel has risen LESS than inflation over the past 20-35 years so its BULL%^$T when airlines claim fuel costs are rising too fast so therefore they have to impose a fuel surcharge.

Again, several FFPs do not charge the YQ (fuel surcharge) on award tickets on their own metal or on partner airlines. I think these are classified as "fees", and as such are included in the catch-all, "taxes and fees".

YQ charges allow airlines to maintain a published seasonal fare basis, but give it flexibility to adjust prices if needed. Given that many airlines hedge fuel contracts, to attempt to maintain forecasted levels, variability in costs is often less of an issue these days. YQ charges are not subject to any corporate contract discounts, which can run into the mid 20% on some routes. And many airlines'/FFPs do charge YQ for award tickets.

So for many reasons, YQ charges are here to stay, and yes they do insult the intelligence.

[WilliaminBKK]

Calling a fuel surcharge "tax" is outright dishonest - its not a tax as it goes 100% to the airline not any Government. However is it par for the course for most FF programs to charge you the tax+fuel surcharge for rewards bookings, Although some airlines fuel surcharges are insulting to the intelligence, whereas others are zero or close to it.

There is actually a good reason why fuel surcharges came into effect (relate dot the IATA pricing and how prices are set in advance etc and then cant be changed till next year etc) but there was only even an excuse to impose it the first year fuel skyrocketed and then not after this. Then they didn't impost a "fuel discount/rebate" once it got cheap again. Having said this, there shoudl not any ANY fuel surcharges anywhere as fuel has risen LESS than inflation over the past 20-35 years so its BULL%^$T when airlines claim fuel costs are rising too fast so therefore they have to impose a fuel surcharge.

If you want to get really angry over the fuel surcharge issue think about this......a carrier serving Frankfurt with a 747 that holds 389 passengers the fuel surcharge is exactly the same as the new A380 that will fly the route and holds 507 pax both aeroplanes will consume basically 975-1025 barrels of fuel on the route/158,000 litres.

[lomatopo]

It should be noted that savvy customers can turn an airlines' fuel surcharge "charade" back in their favor. Sometimes, on YQ-heavy sectors one can add a short tag flight at the end of an itinerary, which does not have to be flown. Adding this tag flight results in all of the YQ charges being dropped from the total price, resulting in a 25 - 40% savings. Is this hard to do, yes. Do the airlines like it, no. Can they stop it, or refuse to board you, no. Google dump comma fuel.

[saengsureeya]

check out the Thai website:

at the bottom of the reward conditions page:

"All applicable taxes and surcharges are the responsibility of the Award ticket holder."

http://www.thaiairways.com/frequent-flyer/en/award-condition.htm

[WilliaminBKK]

It should be noted that savvy customers can turn an airlines' fuel surcharge "charade" back in their favor. Sometimes, on YQ-heavy sectors one can add a short tag flight at the end of an itinerary, which does not have to be flown. Adding this tag flight results in all of the YQ charges being dropped from the total price, resulting in a 25 - 40% savings. Is this hard to do, yes. Do the airlines like it, no. Can they stop it, or refuse to board you, no. Google dump comma fuel.

I certainly wouldn't assume savvy travellers can get away with not paying YQ's long term - it is here to stay and is in the terms and conditions of all programmes. There is massive pressure from OA family members mounting as to why some are paying and some are not, the cold facts are United and American were and in AA's case still in bankruptcy, shame of the bankruptcy proceeding Judges not imposing this loop hole be closed, once AA comes out of bankruptcy and is looking for cash and start to collect UA will follow. It isn't so much that they don't want to impose this cash find asap it is more their terrible financial performance and the technology cost to calculate and collect these fees, the YQ package from IATA/ATPCO is very very expensive and neither are investing with cash in technology.

I don't agree with the pricing model on fuel surcharges but a bum in a seat is a bum in a seat all taxes and charges should be equal-free or not same same as taxes and AIF's.

In terms of hidden city fraud - that's what it is and airlines know about it, can it be caught ? highly doubtful at this point but I certainly wouldn't risk my status and points with an alliance trying to save a few hundred bucks. Go to any airline forum and search "Lost My Status" always people playing these games or selling Ug's.

Frankly it is stupid for UA not to charge their Mplus members a fuel surcharge, if you can skirt paying short term go for it but don't be surprised when the fee hits & yes I am an airline guy so I am brainwashed

[Sam Drucker]

Don't know if the OP is from America? That seems to be the last place where the airlines don't charge the YQ part of a fare for loyalty program awards. I don't know about American and United, but last I heard Delta was tagging on a fee for award flights originating outside the USA (such as BKK>JFK>BKK) that effectively equals the fuel surcharge their foreign competitors are charging. They don't do it on the USA-originating itineraries such as JFK>BKK>JFK.

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[simple1]

Yes, my gripe is more about the fact that I was not informed by either Thai airways or Amex anything about additional charges while inquiring about the whole air-miles program before deciding to enroll. And it appears from their response that they have been instructed not to say anything about the tax charge. Of course not until the customer has been lured into the airmiles program with the idea of free flights...so if a TG flight to Melbourne is about 27K, and 12 of that is tax, then my 55,000.air-miles amounts to 15K baht essentially. How do they calculate 12K on top of that, that is some major tax. However, if I had known this, I would not have enrolled in air-miles, I would have bought the flight using my Amex, accumulated the reward points, and used them other wise. I feel ripped off, what can I say, with a "its not our problem" response from Amex, which is what makes me angry about this. How difficult would it have been for them to say "plus tax", for customers to make a fully informed decision?

It's not AMEX's liability nor Thai Airways. In Australia it is you that has to read the T&C's of a supplier prior to contracting for a service. I suggest the silence you experienced during your call was the AMEX person deciding whether to terminate the conversation or not. Verbally attacking a customer service person regards a company procedure or lack thereof is a complete waste of time. If you are still upset write to the Director of Customer Services & let them know your experience and the outcome you are seeking. Note that company CRM systems do capture each customer contact.

[lomatopo]

Frankly it is stupid for UA not to charge their Mplus members a fuel surcharge, if you can skirt paying short term go for it but don't be surprised when the fee hits & yes I am an airline guy so I am brainwashed

This statement illustrates your lack of knowledge and understanding regarding this issue. And that's to be expected as it is very, very complex, with a long history so there would be no reason for you to be familiar with it. It's not a short-term advantage, and we're not getting away with anything. Let's just say that it is not stupid for UA to not require MP members to pay YQ/YR charges. And I'll leave it at that.

The other issues you've clearly misunderstood, but that's my fault for introducing the the additional, and unrelated to award travel, concept of dumping comma fuel ticketing strategies for paid tickets. Again, this is not related to "hidden city" ticketing, it is not fraud and is something new which, assuming you are retired, you would not be familiar with.

There is some YQ/YR "creep" with DL - they've long charged $2 (Two U.S. Dollars) for YQ on partner award tickets - and maybe AA. I think US and UA remain YQ-free zones for now. I have saved thousands of dollars over the years so thanks UA, and "sorry" to those partner airlines - Sniff sniff. Mmmm, first class on TG, SQ and NH, aahh.

[WilliaminBKK]

Frankly it is stupid for UA not to charge their Mplus members a fuel surcharge, if you can skirt paying short term go for it but don't be surprised when the fee hits & yes I am an airline guy so I am brainwashed

This statement illustrates your lack of knowledge and understanding regarding this issue. And that's to be expected as it is very, very complex, with a long history so there would be no reason for you to be familiar with it. It's not a short-term advantage, and we're not getting away with anything. Let's just say that it is not stupid for UA to not require MP members to pay YQ/YR charges. And I'll leave it at that.

The other issues you've clearly misunderstood, but that's my fault for introducing the the additional, and unrelated to award travel, concept of dumping comma fuel ticketing strategies for paid tickets. Again, this is not related to "hidden city" ticketing, it is not fraud and is something new which, assuming you are retired, you would not be familiar with.

There is some YQ/YR "creep" with DL - they've long charged $2 (Two U.S. Dollars) for YQ on partner award tickets - and maybe AA. I think US and UA remain YQ-free zones for now. I have saved thousands of dollars over the years so thanks UA, and "sorry" to those partner airlines - Sniff sniff. Mmmm, first class on TG, SQ and NH, aahh.

Agreed it is very complex & btw I am not retired as a matter of fact I just received my 25 year service pin and lots of cycles still left. There is no need to make it personal and say I don't understand the issue and then simply say it's not stupid from your point of view. United is leaving money on the table and partner airlines don't like it. Let's just see in 6 months who's correct.

[mogandave]

Wow, you mean you can't get something for nothing? I'm shocked.

FF programs on US airlines are typically much better then on Thai. I use my Thai miles for hotels.

[samran]

I've been a AMEX and Thai FF member for years.

Good value and a very easy way to earn miles if you ask me. We get a trip or two per year out of it.

I - like most people - know that the tax and the fuel surcharge is always seperate, and you pay that with real money. Twas always thus, and thus it shall always be.

[Sam Drucker]

FF programs on US airlines are typically much better then on Thai. I use my Thai miles for hotels.

Depends on what you are focusing on. If it is about getting award seats on the date and time you want them, and without the multi-tier award pricing nonsense that the American programs use, you can't beat THAI.

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