Asia Miles Cathay Pacific News

Cathay Pacific reinstates fuel surcharges on award tickets

Asia Miles and Avios award tickets on Cathay Pacific get a price hike, as the airline reintroduces fuel surcharges on most of its flights.

Last year there was good news from Hong Kong-based Cathay Pacific, with confirmation that the carrier was eliminating fuel surcharges on almost all its flights, including on award tickets, cutting the cash component of redemptions using Asia Miles on its services from 1st May 2020.

Back then, the jet fuel price was near record lows, at around US$200 per metric tonne in Asia for those paying the ‘pump price’, but today it’s a different story.

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Fuel prices have increased significantly, to over US$500 per metric tonne, practically making their way back to levels seen one year ago before the impact of COVID-19 on demand caused such a significant oversupply.

The Jet Fuel price is practically back to pre-COVID levels. (Source: Platts / IATA Jet Fuel Price Monitor)

Cathay Pacific has reintroduced fuel surcharges

The bad news is that Cathay Pacific has found it necessary to reintroduce fuel surcharges on all tickets issued from 1st February 2021, with another increase in store from 1st March 2021.

Cathay Pacific has reintroduced a fuel surcharge on all tickets. (Photo: Hong Kong International Airport)

Asia Miles redemptions are no exception, with the applicable fuel surcharge for the sector(s) in your itinerary now added to the other compulsory taxes and fees, typically levied by airport operators.

What’s the impact?

Good news is that Cathay Pacific’s fuel surcharges aren’t that high, just as they weren’t before being removed in May 2020.

On selected routes, zero fuel surcharge will continue to be applied, like from the Philippines to Hong Kong and from Japan to both Hong Kong and Taipei, however on other routes a per-sector fuel surcharge of US$7 to US$31.30 is now being added.

For tickets issued on or after 1st March 2021, these charges will increase to between US$9 and US$40 per flight sector, around S$12-S$53.

 

While it’s annoying that this sting in the tail is back when you redeem Cathay flights using most frequent flyer programmes, the newly imposed charges don’t fundamentally change the good value you can achieve when redeeming Cathay Pacific flights with a few FFPs.

Here are some examples of the extra charge you’re faced with on these award tickets. They assume travel in Business Class (travel class does slightly impact the taxes charged for itineraries including a departing flight from both Hong Kong and London).

Cathay Pacific
Taxes & Fees
(Jan vs. Feb 2021)
Route Until 31 Jan From 1 Feb Change
SIN-HKG US$31.20
(S$41.50)
US$38.20
(S$50.80)
S$9.30
(+ 22%)
HKG-FRA US$45.10
(S$60.10)
US$76.60
(S$102.00)
S$41.90
(+ 70%)
LHR-HKG US$312.00
(S$414.90)
US$343.30
(S$456.50)
S$41.60
(+ 10%)
SIN-HKG-FRA US$70.80
(S$94.30)
US$109.10
(S$145.20)
S$50.90
(+ 54%)

Based on IATA Consolidated Exchange Rates at 18 February 2021

In some cases, including for long-haul flights originating from Hong Kong, the additional cost is over 50% compared to previous rates. Obviously on routes where other taxes are high (ex-LHR for example) the additional charge, while still unwelcome, isn’t a big proportional impact.

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For tickets issued on or after 1st March 2021, just over a week from now, unfortunately there’s another increase coming. Here are the taxes and fees payable for those award tickets, compared to the rates payable before the fuel surcharge was reintroduced.

Cathay Pacific
Taxes & Fees
(Jan vs. Mar 2021)
Route Until 31 Jan From 1 Mar Change
SIN-HKG US$31.20
(S$41.50)
US$40.20
(S$53.40)
S$11.90
(+ 29%)
HKG-FRA US$45.10
(S$60.10)
US$85.10
(S$113.20)
S$53.10
(+ 88%)
LHR-HKG US$312.00
(S$414.90)
US$352.00
(S$468.20)
S$53.30
(+ 13%)
SIN-HKG-FRA US$70.80
(S$94.30)
US$119.80
(S$159.30)
S$65.00
(+ 69%)

Based on IATA Consolidated Exchange Rates at 18 February 2021

As you can see by 1st March 2021, you’ll be paying 29% more in taxes for a Singapore – Hong Kong award ticket, which may come into play if the Air Travel Bubble ever gets going, and 69% more on a Singapore – Hong Kong – Frankfurt award ticket.

Remember that the increased fuel surcharges from 1st March 2021 won’t reflect when you make a dummy booking until they actually come into effect on that date.

Is it worth booking now?

You can save some of the fuel surcharge impact by booking your award ticket between now and 28th February 2021, avoiding the 1st March 2021 increase.

For most shorter routes it’s probably not worth worrying about, but if you were intending for example to book a Singapore – Frankfurt return trip as a couple in late 2021, you’ll save S$56.40 in total by locking it in before the end of February, which isn’t to be sniffed at.

Booking a long-haul Cathay Pacific redemption before 1st March 2021 may save you a reasonable sum. (Photo: Edwin Leong)

A word of caution though, the future direction of fuel prices is unknown and Cathay Pacific reviews its fuel surcharges on a monthly basis, so April and May 2021 might well see lower fuel surcharges compared to March 2021, for example. You won’t receive any refund in this case, if you have already booked.

Asia Miles impact

Here’s how these latest changes impact the Asia Miles ‘sweet spots’ when redeeming Cathay Pacific flights, based on the new fuel surcharges in effect for tickets issued on or after 1st March 2021.

AM Asia Miles ‘Sweet Spots’
Cathay Pacific
Route Cabin Miles Taxes & Fees
Singapore – Hong Kong Economy 10,000 S$41.50
S$53.40
Business 25,000
Hong Kong – Taipei Economy 7,500 S$44.70
S$56.80
Business 16,000 S$56.70
S$68.80
Sydney – Hong Kong Economy 22,000 S$94.00
S$147.30
Business 45,000
Singapore – Amsterdam Business 65,000 S$94.30
S$159.30
Singapore – Frankfurt Business / First 92,300 S$94.30
S$159.30
Bangkok – London Business 65,000 S$72.90
S$137.90
Business / First 94,700 S$72.90
S$137.90
Bangkok – Vancouver Business 70,000 S$72.90
S$137.90
Sydney – London Business 85,000 S$133.50
S$239.90
Business / First 107,600 S$133.50
S$239.90

Most of these routes remain great value redemptions, even after 1st March 2021, but there are some hefty increases to contend with. On routings involving two long-haul flights, like Sydney to London via Hong Kong, the additional fuel surcharge payable is over S$100 in each direction, or S$200+ for a round-trip.

Avios impact

British Airways Avios points are a great way to redeem shorter Asia-Pacific flights on Cathay Pacific. Here’s how the new fuel surcharges will impact the cash payable on top of your points from 1st March 2021, compared to the zero fuel surcharge days.

AVIOS Avios ‘Sweet Spots’
Cathay Pacific
Route Cabin Miles Taxes & Fees
Singapore – Bangkok Economy 9,000 S$57.10
S$69.00
Business 16,500
Bangkok – Hong Kong Economy 9,000 S$33.40
S$45.30
Business 16,500
Singapore – Hong Kong Economy 11,000 S$41.50
S$53.40
Business 22,000
Hong Kong – Taipei Economy 6,000 S$44.70
S$56.80
Business 12,500 S$56.70
S$68.80

Since these are all short routes, the impact is not that significant and we still consider these to be excellent redemption rates on the routings mentioned if you have an Avios balance or transfer Citi credit card points into the programme.

Alaska Miles award tickets are still exempt

Good news if you are planning to redeem Alaska Mileage Plan miles on Cathay Pacific – Alaska does not pass on the fuel surcharge so you’ll see no difference in the taxes and fees payable on these award tickets either now or after 1st March 2021.

That means Alaska’s ‘sweet spots’ when redeeming on Cathay Pacific remain great value, with a low cash component payable in addition to your miles.