TLDR; These arbitrary surcharges reduce the value of loyalty point redemptions with dubious copays, and are generally nonrefundable for cancellations depending on the carrier and fare rules. They are typically the largest price component of a flight, and excluded from discounts.
Here’s an example Delta flight. Where you’d pay their junk carrier imposed fee with cash, and use 90k miles only to save $135 dollars each way.
Carrier-Imposed Surcharges (Fuel)
A lot of airline tickets add on a carrier-imposed surcharge (otherwise known as a fuel surcharge). This was critical on tickets when the price of fuel was sky high and airlines adjusted this fee as they saw fit. In reality, this is a junk fee that the airlines add on to the ticket because they can and because they get to keep most of this price component – sure, some of this component may go to pay for your fuel on a given flight, but in a lot of cases the fuel surcharge component on a ticket does not match what the fuel would actually cost on your given routing.
Some fuel surcharges can be decent while others could be sky-high – it is important to pay attention to this because when it comes to award tickets, sometimes the fuel surcharge is passed on to you and you are responsible for paying it. There are airlines that charge significant carrier-imposed surcharges, while there are other airlines where the surcharges are relatively low. When it comes down to an award ticket, the frequent flyer program that you’re booking through determines if you’re charged fuel surcharges and not the airline you are flying.
Reference: https://www.travelmiles101.com/airline-ticket-total-price-components/