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| Jets Lined Up at FRA |
Miles and points are a currency that can be exchanged for
goods and services. These goods can also
be purchased for cash, making it a simple equation: Total Value / Total Points
= $x.xx per point. If a flight to Europe
is $1,000 or 50,000 miles, then each mile is worth 2c. The denominator will always be known, but the
numerator gets fuzzy when you are buying awards that you would never buy with
cash. A first class trip to Europe costs
$13,000 or 135,000 miles; yielding almost 10c per mile in value! But I would never pay $13,000 to fly to
Europe, so what is it really worth?
Priceless is the best answer, but it doesn’t help with the math. I just total the perceived value of the experience
and that’s the value. The means a first
class award is more like 3-6c in value; still a good deal.
Do the math for yourself and use your answers to decide if
to spend miles or cash. For example, I
would use miles to book a $450 domestic round trip, but use cash for a $300
ticket. It’s a gray area for borderline redemptions. I’ll lower my threshold if my balance still
has a large number of miles. Also, if
your credit card doesn’t earn at least 2c in value for every dollar spent, just
use the fee free Fidelity Amex. It has 2% cash back on every purchase and cash
is accepted by any airline.
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| Sun Rise at ORD |
SPG – 3c
Starwood Hotel (SPG) points are my favorite. With the Cash & Points redemption option,
SPG points are consistently worth about 4c each, while full points awards run
2-3c. The SPG Amex (business card has the
better sign up bonus) earns one point per dollar and two points for spending at
SPG hotels. Points can also be transferred
to about 30 airline programs with a 25% bonus for every 20,000 points transferred. This makes the SPG card better for earning
American or Delta miles than the airlines’ own credit cards. SPG is my favorite program and currency because
of its high value and flexibility.
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| W South Beach Miami Hotel View |
Drawbacks: There aren’t SPG hotels everywhere and the top
level hotels cost too many points to have any value. The cobranded credit card is an Amex and not
everyone takes those (like my local liquor store). Mile awards with United and Southwest are
poor value.
Minimum balance of 4,000 needed to achieve top value.
United miles are the best in the air. They are part of the Star Alliance (25
airlines and growing) and have a few other strategic alliances for miles
redemption (Aer Lingus has great availability to Europe). Their reservations people are very good and
the website can be used to find and book complicated award trips.
Minimum balance of 12,500 needed to achieve decent value.
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| United Airlines Jets at EWR Sunrise |
American – 1.5c
American is a oneworld partner and doesn’t charge excessive
fuel surcharges on awards. They allow
one way bookings and have a decent award chart.
American availability, coach and first, to most places not over the
Atlantic, is second to none. Good off
season discounts and a cheap oneworld partner chart (80,000 miles in first
London to Australia). oneworld coverage
is spotty and fuel surcharges pop up on European carriers.
Minimum balance of 12,500 needed to achieve decent value.
Delta – 1c
Delta has a three tier award chart and every time I want to
redeem, my flight is in the second or third tier, destroying the value of my
miles. They are a Sky Team partner and
Virgin Australia partner, so It’s best to redeem miles with Air France/KLM or
Virgin Australia. I wound up cashing in
my miles for Economist subscriptions, 3,200 for a year or 3c in value. Not bad considering my options.
Minimum balance of 25,000 needed to achieve decent value or
3,200 for a year of The Economist.
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| Not Every Trip Is Glamours |
Alaska Airlines – 1.6c
I credit my Delta and American flights to Alaska. Alaska isn't part of an alliance, but are
partners with most airlines you would want to fly not in the Star Alliance. The award chart is downright cheap in places
too. The flexible earning and redeeming
of miles makes Alaska a great program to have miles in. One ways are allowed and there is a cash and
points option. Partner awards have to be
a single carrier plus Alaska to get you to the gateway city. Not Star Alliance good, but close. Other than flights and credit card spend (not
a good deal), it’s hard to earn miles with them (SPG transfers mostly).
Minimum balance of 12,500 needed to achieve decent value.
US Airways – 1.7c
Star Alliance member with a reasonable award chart (more
reasonable than UA to Asia in business).
Only allow round trips. Can’t
book partner awards online, so be prepared for an hour long call with reservations. Great deals on off peak
awards. The Mileathon promotion runs
annually and is a great way to stock up on miles. US Airways also runs frequent mileage purchase promotions. I constantly fear award
chart devaluation.
Minimum balance of 25,000 needed to achieve good value.
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| Use BA Miles to Fly LAN Around South America |
BA is great for short one segment trips on American or LAN. BA has a distance based award chart, allows
one ways, and has partner booking online. For long flights (less generous
pricing), connections (each segment is charged, not total distance), premium
cabins (x2 for business, x3 for first), or trips in Europe (steep fuel charges)
don’t bother. Good deals are found
mostly in the America’s. The scary high fuel charges take the value out of any BA, Iberia, of Finnair award.
Minimum balance of 4,500 needed to achieve decent value.
Other Carriers – 0-10c
Southwest will sell any seat at 60 points per dollar so they
have a fixed value of 1.67c per point (not bad really). Other airline programs can be anywhere. My Frontier miles might only be good for a
magazine subscription. Foreign carriers
could have no value or tons of value, depending on if you need to use those
airlines. If you are going somewhere only Emirates flies, then those miles will be worth much more. It’s too subjective for me to
give a definitive value.
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| Southwest and US Airways Jets at ABQ |
Great post. Airline miles are definitely not created equal and very difficult to precisely value. Page bookmarked.
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