Taxes and Fees on Flights: What You Need to Know

Whenever I make flight bookings, I always look at a breakdown of the taxes and fees to see what I’m actually paying for. Since it’s not possible to avoid paying them, I thought it might be interesting to dig a bit deeper into finding out what we’re actually paying for whenever we book air travel with points or cash.

The taxes and fees that you pay when booking a flight vary wildly, and are dependent on the airline you fly with, the class of service you’re in, and the airport, province, territory, or country you depart from. In some situations, it amounts to next to nothing, while in others, it adds a significant cost.

Here is an overview of the most common taxes, fees, and surcharges found on air travel bookings.

Government-Imposed Charges

Many of the extra fees on airline tickets are imposed by governments around the world.

Taxes

From a Canadian perspective, the most obvious culprits are the Goods and Services Tax (GST) and Harmonized Sales Tax (HST). While this doesn’t have much of an impact on award bookings, depending on the cost of the base fare of a paid ticket, it could become sizeable.

The GST or HST rate is determined by the city of origin on your booking. For example, a booking from Vancouver to Toronto will incur a 5% GST cost, while a booking from Toronto to Vancouver will incur a 13% HST cost. 

For round-trip bookings, the tax amount is based on the city of origin for the entire booking. So, if you were to book from a city in a province with a lower tax burden, such as Calgary, you’d wind up paying less than from a city in a province with a higher tax burden, such as Toronto.

Suppose flights between Calgary and Toronto have a total cost, inclusive of the base fare and fees, of $100 per direction. For the purposes of this example, we’ll ignore the fact that you get charged HST on the Airport Improvement Fee in Toronto and GST on the Airport Improvement Fee in Calgary.

Booking two one-way flights between Toronto and Calgary would incur a total of $18 paid in taxes (5% GST for the Calgary–Toronto flight and 13% HST for the Toronto–Calgary flight), whereas booking the same flights round-trip out of Toronto would incur a total of $26 (13% HST for both legs).

Consider booking two one-way flights to save a few dollars on taxes and fees

While this particular example was done with a low fare, as the cost of the ticket increases, so would the amount of taxes charged on the booking. Depending on your province of origin, it may be worthwhile to consider booking two one-ways instead of a round-trip.

For example, the total sales tax for business class flights on a random date between Halifax and Vancouver would cost $375 if booked as a round-trip or $252 if booked as two one-ways. Indeed, there are many better ways to spend $123 on a trip than simply forking it over in taxes.

Security Charges

Another charge common to bookings around the world is some form of security charge.

In Canada, the Air Travellers Security Charge (ATSC) was introduced after the 9/11 attacks in New York City. This fee is meant to offset the additional security expenditures in airports that keep the travelling public safe.

The charge depends on your origin and destination:

• $7.12 per direction within Canada
• $12.10 for flights between Canada and the continental United States
• $25.91 for travel outside of “the continental zone”.

In the United States, the similar September 11 Security Fee is currently $5.60 (USD) per one-way trip that originates in the United States.

Personally, I don’t mind taking a bit of extra time at the airport to ensure my safety and that of everyone else. I consider the extra fees as payment for peace of mind.

So, next time you’re standing in an endless line waiting to unpack your bags and have your body scanned, remember that you’ve paid for this privilege. Alternatively, apply for a NEXUS card for shorter lines and an expedited experience.

Arrival & Departure Fees

Some countries also impose fees on passengers during either their departure or arrival, or in some cases, for both. The amount you pay is sometimes also tied to your class of travel. 

One of the most well-known examples is the so-called “luxury tax” for passengers departing from the UK. Known as the UK Air Passenger Duty, the amount paid depends on how far you’re travelling and the class of service you’re travelling in. 

For example, a passenger flying in economy from London to Toronto would pay a total of $130 (CAD) for the UK Air Passenger Duty, while a passenger on the same flight in business class would pay $286 (CAD).

Most passengers departing from the UK have to pay the APD

Planes that weigh more than 20 tonnes equipped to carry fewer than 19 passengers would have to pay around $946 (CAD) per passenger.

Similarly, when flying to or from countries that generate a lot of revenue from tourism, you may notice a host of extra fees added to your booking. In some cases, they can add up to fairly significant amounts.

For example, many countries in the Caribbean are notorious for adding on extra fees for air passengers.

Using ITA Matrix, I selected round-trip direct flights between Toronto and Kingston, Jamaica for a random date in the winter. I was intrigued by the sheer amount of additional taxes that were added onto this ticket, which are clearly broken down in the search results. 

Of the 11 additional surcharges on this ticket that total $335.51, those from Jamaica add up to $193.70, or 16% of the total cost of the ticket.

Another example of incremental taxes and fees comes from the Maldives. Booking a departing flight in economy from Malé to Abu Dhabi will incur an additional $60 USD ($79.80 CAD) in airport fees.

While the same flight in business class bumps the cost up to $120 USD ($159.20 CAD).

So, not only will you be paying a premium for that overwater villa, but depending on the class of service in which you depart, you’ll have to shell out some extra cash.

Interestingly, Maldivian passengers used to pay a reduced fee, but as of January 1, 2022, they are subject to the same fees as foreign nationals in any class of service other than economy.

Airport Improvement Fees

I recall flying from YXS (Prince George) to Edmonton via Vancouver in the early 2000s. As I entered security, a person standing at a booth stopped me and demanded $10 from me. I was taken aback, having never encountered this before, and felt offended that he was asking me for cash. 

The angst-filled teenager in me challenged him and tried to avoid paying it, but alas, he wouldn’t let me pass before I gave him the $10 I had to buy some snacks on my layover in Vancouver. Since then, I’ve held a grudge against paying airport fees, but they have become a necessary evil in many airports around the world.

In Canada, most regional and major airports charge an “Airport Improvement Fee” of between $2 and $40 to help maintain the airport’s infrastructure and expand to meet a growing passenger demand. Many airports have a detailed explanation on their website justifying the fee, as they need to get money somehow.

While I’m glad that I haven’t seen one of these cash-collection points at an airport in a very long time, I always moan when I see an Airport Improvement Fee baked into the cost of one of my tickets. 

Recently, when making a booking, I noticed that the Airport Improvement Fee amount depended on the length of layover at the airport. 

For example, at Vancouver International Airport, a layover of less than four hours has around $34 fewer total taxes and fees than a layover of more than four hours.

The fee breakdown on the payment page shows that the booking with a shorter layover was only subject to a $5 Airport Improvement Fee and a $7.12 Air Transportation Security Charge…

…while the longer layover was subject to a $30 Airport Improvement Fee and a $14.25 ATSC.

Indeed, this seems to be the case in other airports in Canada, too:

• YYC’s website states that the $35 Airport Improvement Fee isn’t charged to domestic passengers with a connection of less than four hours or to international passengers with connections of less than 24 hours
• YYZ charges $30 for departing passengers and $6 for connecting passengers

If you’re like me and enjoy spending time lounging in and exploring airports, the length of time on your layover may add a few extra dollars to your total cost. 

Airline-Imposed Charges

Carrier-imposed surcharges have long been the bane of points enthusiasts’ existences.  

Airlines justify charging fuel surcharges as a way to protect themselves from volatile fuel prices, increased costs during peak travel periods, and unpredictable operational costs. In other words, it’s a way for them to generate more money to use how they see fit.

In Canada, we are fortunate that there are no fuel surcharges imposed on Aeroplan award tickets. However, carrier-imposed surcharges are often added to award bookings with other loyalty programs.

As always, investing some time and energy into understanding carrier surcharges can wind up saving you a tidy sum of cash. In some cases, the country of origin may regulate the amount of carrier-imposed surcharges, so you may wind up with a lower cost by being strategic about where you depart from.

On paid bookings, carrier surcharges can often make up a large percentage of the total cost of the ticket. Consider the following breakdown of fees for flights with Lufthansa between Toronto and Frankfurt.

The $675 carrier surcharges for this booking make up 65% of the total cost. When combined with the other surcharges, 87% of the total cost of the ticket is in taxes and fees, and just 13% is the base fare.

Lastly, some airlines impose a fee for booking a particular product on particular routes. My favourite example of this is Air Canada’s Equipment-Type Surcharge.

When flying on a paid business class fare on domestic or transborder routes, there is an additional $300 added to your ticket if your flight offers Air Canada Signature Class with lie-flat seats. 

Given that these flights are less than five hours in duration, I think that this is a pretty steep price to pay for the added benefit of lying horizontally.

To recoup the cost, perhaps you’ll go through as much food and drink as possible to justify spending the extra cash. Alternatively, I’m much more likely to adopt the “Latitude Attitude” or book business class using Aeroplan points to avoid the charge altogether.

Conclusion

Taxes and fees are something that can’t be avoided when paying for an airline ticket. 

Some of the fees imposed by governments go towards paying for the cost of keeping travellers safe or for using government-run facilities. Others seem like a revenue-generating mechanism to line the coffers of government accounts.

While I find the most frustrating fees to be the ones imposed by airlines or airports, I’ve come to accept them as part of the cost of travel, and something I’m willing to pay – albeit doing my best to avoid them whenever possible.

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