Middle Age Miles’ great friend Jason Voorhies 13 (JV13) is gearing up in the points-and-miles world. He has read up on our “How to Get Started” articles, including What Card Should I Get First? A Getting-Started Points-and-Miles Strategy with Chase. He has started out by applying for a Chase Ink Business Preferred card.
Now, JV13 is starting to get excited about using points and miles for some great travel experiences. He remarked to me that he’ll have a lot to learn about redemptions and he’ll look forward to learning more about that side of the equation on Middle Age Miles. We have a nice general article already, on Points-and-Miles Program Basics & Redemption Basics. But JV13’s remark reminded me that it would be nice to write more about real-world examples of redemptions, along with my strategies and thought processes.
We made 3 separate airline redemptions in the past week, so I thought this would be a great opportunity to use them as a group of real-life redemption case studies.
(1) Dallas to Zurich, July 2019
[2 transatlantic business class tickets during peak summer season for $125 total out-of-pocket]
Middle Age Miles son Zack and daughter-in-law Erin are experienced world travelers. Yet somehow, we’ve never taken a big international trip with just the four of us. We’re looking to change that next summer. During a recent visit, we laid out the framework of a plan for a trip next July to Switzerland, and with any luck, we’ll also be able to venture into western France to catch one or two stages of the Tour de France cycling race.
An important part of the trip planning of course, will be getting Philly and me from Dallas to Switzerland by air. And this trip starts out with a couple of challenges. One, our dates are pretty much inflexible because of work/vacation-day limitations and the specific dates of the Tour de France stages we’d like to attend. Two, we’ll be traveling in an absolute peak travel month where award availability is scarce and paid fares are high. Another nice-to-have would be to travel in business class if possible.
When starting to look for tickets, the first thing I saw was that current fares are basically at their peak – roughly $2,000 for a coach ticket. One technique that we would normally use to travel to Europe would be to “pay” for a coach or premium economy ticket on American (and when I say “pay,” of course I really mean “use Chase UR, Amex MR or Citi TYP points”), then use a Systemwide Upgrade (SWU) to try to upgrade into business class. We have the luxury of having SWUs as Executive Platinums on AA, but you could also use an alternative upgrade instrument, such as an AA points-and-cash upgrade or perhaps even an upgrade certificate from AA’s Business Extra program. One downside to this approach is that the upgrade may never clear. It’s certainly not currently available, and we’re talking about a July flight to Europe here.
Another alternative would be to purchase a business class ticket outright. Right now, a business class ticket on the “best” routing would be about $7,100, or a reasonable alternative routing that would cost us about a half-day on the front end of the trip would be about $4,500. Those are still peak-pricing fares. And frankly, I just can’t swallow paying $4,500 each for 2 tickets to Europe (or the UR/MR/TYP equivalent; in fact, we don’t even have sufficient UR/MR/TYP balances at the moment to cover those tickets!).
On the coach fare, my experience tells me there’s at least a chance of a sale on paid fares sometime during the next few months. We’d need to be on the alert for that. However, I wouldn’t expect the price for a paid business class ticket to be less than the current $4,500 at any point between now and July.
On a paid fare, we’d be locked in as soon as we booked, save for the option of cancelling or re-booking with a fee, which I would expect to be $275 per ticket. At this point, I’m not anxious to lock in at peak prices, with the potential to try for an upgrade that may or may not clear. All this pointed me toward looking at award options.
A quick (but not exhaustive) search didn’t reveal any non-AA/Oneworld award choices in business class. AA, though, had some possibilities. We could book AAnytime awards in business class, on our desired date and most-preferred time, for a total of 245,000 AAdvantage miles + $62 round-trip. The breakdown was 110,000 AA miles + $5.60 on the outbound, and 135,000 AA miles + $57 on the return. Because of our Executive Platinum status, the tickets could be canceled for a full refund of the points and fees. All flights could be guaranteed into domestic first class between DFW and Philadelphia (PHL), and business class for the transatlantic legs between PHL and Zurich (ZRH).
It’s also possible to book a business class saver award via AAdvantage, for 57.5k AA miles each way, 115k AA miles total. However, these routings are all two-stop, and they are on British Airways (BA) for the transatlantic legs, with corresponding high fees of approximately $1,300. The return flights also require a short overnight, meaning that we’d have to pay for an extra hotel night on the way back, plus deal with the accompanying inconvenience, plus arrive back into Dallas a day later than we preferred. If all other things were equal, we’d strongly consider paying an extra $1,300 to save 130,000 AA miles – that is, effectively “buying” AA miles at 1 cent per mile. However, the overnight layover and the extra stop are more than enough to cause us to prefer the 245,000-mile + $62 option.
We went ahead and booked the AA Anytime awards for 245,000 AA miles + $62 each for round-trip business class. This gives us:
- A reasonable placeholder that we can use if we want
- Complete flexibility to cancel for any reason
- Including that we’ll still have the option to book a paid fare if there’s a fare sale later; and then we can try to score an upgrade
- Note that we have reasons to prefer the paid fare-plus-upgrade route, as the miles flown and dollars spent would then count toward re-qualifying for elite status next year
If we’re looking at “value” in terms of cents per point, this redemption turns out quite well, even though they are Anytime awards rather than Saver awards. Recall that our “baseline” value for AA miles is 1.25 cents per mile. So, if you’re getting more than 1.25 cents per AA mile, that’s generally a good redemption.
If you use the current actual paid fare for our exact flights, the cents-per-point value for our AA miles would be $7,050 / 245,000 = 2.88 cents per AA mile. That’s great value. Remember, though, that there’s a reasonable alternative flight available for about $4,550 in business class. Using that fare instead, we’d still be looking at a cents-per-point value of $4,500 / 245,000 = 1.84 cents per AA mile, which is still very good.[One other small point here – Philly actually still had her 10,000-mile rebate for 2018 available to her. This is a benefit of several AA co-branded credit cards, such as the Citi AA Platinum card and the Barclays AA Aviator Silver card. Using the rebate for this redemption, it actually only cost her 235,000 AA miles for this ticket, which bumps her cents-per-mile value up even a little higher.]
Finally, remember that we said we really wouldn’t pay $4,500 out-of-pocket for flights to Europe, even in business class. So let’s look at it a different way. If we use our baseline value of 1.25 cents per AA mile, we’re looking at a “cost” of $3,125 for our tickets ((245,000 * 0.0125) + $62). That still seems like a very reasonable cost to get from Dallas to Switzerland in business class on all legs, on our preferred airline, on our exact best preferred dates and routing, with very minimal out-of-pocket cost, and with complete flexibility to cancel if needed. So, if we use these award tickets as we’ve currently booked them, I’ll feel just fine about it.
(2) Dallas to California Bay Area, January 2019
[2 tickets for a high-demand event for $33 total out-of-pocket]
Disclaimer: I’m going to be deliberately obscure about this because Philly will kill me if I jinx anything.
With that introduction … There is a certain sporting event occurring in early January in the San Francisco Bay Area of California that Philly and I may very much want to attend. On the other hand, just playing the odds, it’s definitely more likely that we won’t be attending than that we will.
American Airlines seems to be acutely aware of potential high demand for the necessary travel dates. Round-trip coach tickets between DFW and SFO/SJC are already in the range of $650 or higher. And under the circumstances, no one would be expecting those fares to go down as the dates get closer.
Armed with the ability to cancel award flights for free, as a benefit of AA Executive Platinum status, I set out to see if I could find some reasonable award flights to book. The idea would be to lock in some seats for us as placeholders if needed, while retaining complete flexibility. That way if the trip becomes certain, we can search for paid fares at that time (possibly using a companion certificate on American or Alaska, or maybe UR/MR/TYP points), and then decide whether to book a paid fare or just take the award flights.
As it turns out, I was very excited to be able to use AA miles to book a very reasonable one-stop on the outbound from DFW to SFO, and an excellent non-stop for the SFO-to-DFW return. Both legs were at the Saver level, 12,500 AA miles. Round-trip, each ticket was 25,000 AA miles + $16.80. On the outbound leg, the first flight is on American, and the second shorter flight is on Alaska. On the return, it’s a non-stop on Alaska. We wouldn’t have elite benefits on the Alaska legs, but in light of the great benefits of these flights, we’ll certainly live with that.
Value-wise, if you compare to a $650 paid fare, you’re talking about 2.53 cents per AA mile (($650 – $16.80) / 25,000). It’s not quite apples-to-apples, though. The paid fare is more convenient and comfortable as both legs would be non-stop and we’d have AA elite benefits. However, the award booking is completely refundable, which is crucial for this situation where we’re more likely to cancel than to fly.
An alternative point of view is to start with our baseline of 1.25 cents per AA mile, then see how much these tickets effectively “cost.” With that calculation, we’re looking at about $329 ((25,000 * $0.0125) + $16.80 = $329). That’s a pretty reasonable fare for the DFW-SFO route any time, much less on high-demand dates.
Bottom line, I’m very happy to have thought of this and put these placeholder award tickets on the books. We’ll be even happier if we get to use them!
(3) Dallas to Houston, this week
[1 last-minute ticket for $37 out-of-pocket]
For our last case study, we have a family member who needs to fly round-trip between Dallas and Houston this week. We have a little flexibility on times, but basically no flexibility on dates. We’re making our reservations on short notice, such that advance planning wasn’t possible. Paid fares are at least $450. Could we use our points to help our family member make this trip more economically?
It turns out the answer is yes. Our first step was to identify what airlines fly the route – basically, Southwest, American and United. We ruled out Southwest as an award option quickly, because Rapid Rewards points and credit card points would both be tied directly to the paid fare. The paid fare is high, so the number of points would be high, too. That left us with American and United. American flies from DFW to both Houston airports (Intercontinental (IAH) and Hobby (HOU)). United flies from DFW to IAH. I was actually surprised to learn about the DFW-HOU American Eagle regional jet flights.
Both AA and United had some Saver-level availability for the outbound, but AA had a flight that was by far the most convenient. Because I have elite status with AA, I was able to use 7,500 AA miles from my account + $5.60 to book this ticket without any close-in booking fees.
On this outbound, note that non-elites on AA would have a close-in booking fee of $75 – but this fee is waived if you have any elite status on AA (including Gold). For a non-elite, an option to get around this fee would be to book the Saver-level ticket using Avios from British Airways or Iberia (which could potentially be transferred in from Amex MR or Chase UR points).
On the return flight, there wasn’t any AA Saver-level availability during the evening on the preferred date. Returning on a Saver-level AA ticket would have meant spending an extra night. But a convenient flight was available on United at the Saver level. The award price on United would have been 10,000 United miles + $5.60, before the close-in booking fee was applied. I’m Silver with United, which would have resulted in a $50 close-in booking fee (less than $75 for non-elites, but still) and a total price of 10,000 United miles + $55.60.
However, we had a better option – using Avianca LifeMiles. United and Avianca are Star Alliance partners, and you can redeem LifeMiles for Saver-level award flights on United. I had set up a LifeMiles account several months ago, but I’d never used it. Thus, I had a zero balance. But I knew I had the option to transfer Amex MR points or Citi TYPs to LifeMiles at a 1:1 ratio, and my understanding was that transfers would be near-instant.
Using LifeMiles would have 2 benefits over United. One, the flight would cost only 7,500 LifeMiles, as opposed to 10,000 United miles. And two, the close-in booking fee on LifeMiles would be lower – $25 instead of $50.
I knew I wanted to transfer Citi TYPs for this redemption, as they’re worth less to me than Amex MR points. I logged into my Citi online account, clicked over to the ThankYou site, looked under the “Travel” tab on the menu, found the “Points Transfer” option, scrolled down to Avianca LifeMiles, and clicked “Transfer Now.”
I could only transfer TYPs to LifeMiles in 1,000-point increments, so I transferred 8,000 TYPs. I instantly received confirming emails from Citi and LifeMiles. Once I logged out of my LifeMiles account and back in, the 8,000 miles were already there. I was then able to use the LifeMiles website to book the desired flight. Done and done.
Because of the 1,000-point increment limitation on transferring TYPs to LifeMiles, I was left with 500 orphaned miles in my LifeMiles account. I’m actually ok with that. When I have a zero balance, I’m always concerned that the program will close my account for non-use. Now that I have activity and a small balance, I don’t have to worry with that for now with LifeMiles. In addition, given how smoothly this transfer and redemption went, it surely increases the chances that I’ll be using the TYP-to-LifeMiles trick again in the future.
Finally, let’s think about the value for this transaction in terms of both cents per point and what the tickets “cost” us.
On cents per point, let’s break it down by segment and arbitrarily say that each leg would have cost $225 (which is actually pretty close). We’ll also assign the entire 8,000 TYPs to this transaction even though we have 500 left as LifeMiles.
- On the outbound, we got 2.93 cents per AA mile (($225 – $5.60) / 7,500)
- On the return, we got 2.43 cents per TYP (($225 – $30.60) / 8,000)
- Or, if you want to look at the cents-per-mile value using the 7,500 LifeMiles in the denominator, we got 2.59 cents per LifeMile (($225 – $30.60) / 7,500)
Alternatively, we can look at our total “cost,” using our baseline values of 1.25 cents each for AA miles and Citi TYPs. From that perspective, we “spent” a total of 7,500 AA miles, 8,000 Citi TYPs, and $36.20. Thus, our total “cost” was $229.95 ((7,500 * $0.0125) + (8,000 * $0.0125) + $36.20). And only the $36.20 was actually out-of-pocket. That looks far, far better than a $450 paid fare!!!
We’re always glad when we can use our points-and-miles hobby to help out family, and this redemption certainly fit the bill.
Do you have comments on our redemptions and strategies, or ways we could have improved them? Please let us know in the Comments!
We hope that our analysis of these recent redemptions helps you understand how to actually use points and miles for great travel. At Middle Age Miles, we’re happy to share our thought processes and tips so you can achieve your travel dreams for less! To see all of our insights, please Like and Follow us on social media at:
Please share and re-tweet our posts and tell all of your friends about Middle Age Miles! Thank you!