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!

The offenders for this article were Interjet and rival Volaris.

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.

Wrapping up

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.

Form + function = tech for humans. PM @Microsoft building the future of @Windows (fmr @Azure_Synapse , @MicrosoftDesign ). Nobody wins unless everybody wins.

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