Trying to get a great low-cost airline deal? Always buy with the local currency!
The USD/MXN Tax — exchange rate variability
While planning a flights to a couple of places in Mexico for later this year, I noticed something I hadn't noticed before: The ticket prices in US dollars never match the Mexican pesos amounts.
This is far from being news, but a little math showed where one gets more bang for their greenback: Fuel surcharges!
These numbers feel a bit off…
Naturally, a bit of Googling helped:
Since more math always helps:
Doing the math
Now, let's break that apart using Excel, while doing basic math to get the exchange rate:
As you can see from the above chart, when paying in USD, one gets ripped off on the actual base fare and the value-added tax (VAT).
$16.50 pesos for a dollar!
On the other, hand when paying for that extra fuel, the deal is quite good:
$20.10 ≈ $20.09
Some hypotheses I have around the rate differences include:
- Processing fees for international credit card processing (baked into the cost of the exchange rate).
- Commissions (and other) fees that the airlines profit from.
- Regulation around fuel surcharges and associated taxes (could explain why these are surprisingly fair).
Another interesting thing is the minimal difference between the taxes for departing airports — one being MEX and the other being a much smaller airport.
User experience — as always…
Bad, but almost always part of lower cost airlines… promoting ridiculously low fees if you're willing to not carry luggage, choose a seat, or any other amenities.
Without delving further into a usability study, Volaris' website did not work for me. I kept getting random errors with my credit card. Interjet's didn't work at first, until I navigated to the /en-us part of their website. They forget that people who are fluent in Spanish live outside Mexico, and will try to pay for their tickets through the generic (/es-mx) experience. On second thoughts that's probably what happened with Volaris too.
In the end, I gave up and paid the extra fee because, at some point it is not worth it to spend hours over the phone with CSRs and banks; I already did that trying to get a refund on the Mexican tourism tax with Delta, and I'd rather enjoy the Unbearable Lightness of Sundays.