Update 3/16/17: Looks like TAP made a mistake and is now in the process of retracting their fuel surcharges. I believe the ban on fuel surcharges in Brazil is actually still in place, check out this post written by a lawyer, blogger, and travel consultant for more info (it’s in Portuguese so just use a translator).
The Brazilian government has decided to once again allow fuel surcharges on flights originating in Brazil. They originally banned them in 2010, but yesterday decided to repeal that decision.
While the legislation shouldn’t affect consumers buying cash tickets, it will increase the overall price of redeeming rewards on flights originating in Brazil–in some cases dramatically. Note that fuel surcharges on flights into Brazil were always legal and will continue to be.
Why This Matters
Many airlines collect fuel surcharges on awards when the carrier charges them, which can make for high out of pocket costs–especially on premium cabin awards. Expensive fuel surcharges negate the value of many awards that would otherwise be a great deal (i.e. are cheap in miles). Awards originating in Brazil have been a refreshing loophole, like the ability to fly Lufthansa Business Class between the two continents for 67,500 Lufthansa miles and just taxes, or Iberia Business Class from São Paulo to Madrid for 42,500 British Airways Avios and only taxes.
Goodbye loophole. Meanie.me reported the sad news yesterday.
As of Now, Only TAP Portugal is Levying Fuel Surcharges
TAP Portugal is the first to cash in, as you can see here in this Business Class flight between São Paulo and Lisbon that has $200 in fuel surcharges. Two days ago this would have been illegal.
You can check for fuel surcharges ITA Matrix. Any charge labeled (YQ) or (YR) is a fuel surcharge.
Other major airlines haven’t followed suit quite yet, but I’m sure it is just a matter of time. Take this British Airways Avios Award flying Iberia Business Class between São Paulo and Madrid. The out of pocket cost is just $35.83…
…which you can tell involves no fuel surcharges by looking at ITA Matrix. No (YQ) or (YR) in sight.
I would act immediately to save yourself hundreds of dollars if you were considering an award originating in Brazil booking with miles that pass along fuel surcharges (think British Airways Avios, Flying Blue Miles, or Lufthansa miles, for example). Especially if it’s a premium cabin award. I’d bet the Iberia Business Class award above will shoot up at least $200 in out of pocket expense with the addition of fuel surcharges.
As of yesterday, Brazil has changed legislation to allow fuel surcharges on airline tickets originating in Brazil. This will results in more expensive awards that depart the country.
If you were contemplating/planning a redemption originating in Brazil, pay attention to this post. It could save you some serious cash.
Hat Tip One Mile at a Time