The US Airways Dividend Miles Tax Game

While charging fraudulent “government” taxes on Dividend Miles transfers appears to be a nefarious policy choice by US Airways, another equally distressing issue is just as concerning — agent incompetence may mean you pay a lot more taxes on your US Airways award trip than you should.

The problem

I will start by saying that I do not think this problem is deliberate, just a reflection of outmoded technology and poor training. While some simpler US Airways award itineraries will auto-price, I find the majority of awards will require a US Airways telephone agent (because most partner space cannot be booked online!) to call the rates desk in order for taxes to be manually calculated.

That can work out to your favor if an agent fails to include fuel surcharges on British Airways or Iberia flights, but this happens less and less and what is more likely to happen is that agents come up with additional taxes or fees that should not be collected.

Let me give you an example that led to this post: last week I booked a rather complex award ticket (four segments per direction) for a client from Mexico City to Bali. The itinerary included one longhaul British Airways flight, which carries a pricey fuel surcharge.

When I put the reservation on hold for the first time, the agent placed me on hold to check on the taxes and came back with a quote of $707.45. That sounded a bit high, so I asked her for a breakdown. She put me on hold and came back back seven minutes later with no breakdown but did have a new tax quote – it should have been $631.43. 

Ok. The client wanted to change the date on a Bali – Doha flight so that kicked out the stored taxes and required a new re-price. This time, despite no addition or deletion of a stopover, change in city pair or carrier, or any change other than a date, taxes came out to be $496.20.

But wait! The client then decided to cut short the stay in Doha. By eliminating that stopover, the taxes again had to be re-calculated. This time, they came out to $559.55 – yes, by eliminating a stopover (which ostensibly should reduce, not increase taxes) the price went up by more than $60.

You can see that there is seemingly no rhyme or reason to how US Airways calculates applicable taxes. If you think your taxes are too high – call in again and have the taxes re-checked. Chances are they will be substantially different (the fluctuations above cannot be attributed to changes in exchange rates).

How to get an idea of what taxes should be

You can get a good idea of what taxes should be by using the ITA Matrix search page to pull up a breakdown of the taxes.

Here’s a simple example – a r/t from San Francisco to Hong Kong on Cathay.

Note that with the exception of British Airways, Iberia, and Finnair (yes, Finnair in my experience), US Airways does not collect fuel surcharges, which show as YQ or YR in the fare breakdown. Of course the base fare is zero since this is award ticket, so all that you should be responsible for is the government taxes in the box above.

Award tickets and revenue tickets do not always align (if you have a multi-carrier award itinerary, you often cannot easily search for the revenue price of that ticket), but if you have a complex itinerary you can try ITA’s multi-city search to input your city pairs and get a good idea of what your taxes and any applicable fuel surcharges should be.

I would never quibble or pennies or even dollars when it comes to paying US Airways taxes, but you do yourself no favor if you do not check and make sure you are paying roughly the correct amount of taxes on your US Airways award. If it seems too low, well…that’s your ethical issue…but if it seems too high just gently ask that the tabulation be redone and you may find yourself saving hundreds of dollars.

Get Daily Updates

Join our mailing list for a daily summary of posts! We never sell your info.

SUBSCRIBE!

You have Successfully Subscribed!