Frequent Flyer Program Points / Miles Inflation

Airline Award Price Inflation

Inflation is a great way for governments to take wealth and reduce their debt. It happens continuously, but no one really notices, so it's a low risk political move.  By creating more currency, the government receives the full value of the new money while everyone's existing money is worth slightly less.  It's something everyone endures, but no one enjoys. 

South American Style Currency

Recent Inflation Victim

Airlines also manage a currency and create inflation. Airlines created their own currency with points programs and have been adding more currency than is being redeemed.  This creates an over supply of currency against a static (more or less) supply of awards.  The unbalanced supply and demand creates an opportunity for point inflation. Airlines manage their currency like Venezuela or Argentina.  There is constant inflation by creating more currency with fixed award opportunities.  They also engage in large and sudden devaluations periodically.  Venezuela has inflation every day, but they will also suddenly change exchange rates.  Both destroy currency value, but the gradual devaluation stings less.  Airlines do the same when they change their award charts (British Airways most recently).  Awards that cost 80,000 miles yesterday can cost 100,000 points today when the award chart changes over.  These massive changes are usually, but not always, announced several months in advance.

More Miles Pursuing Same Seats

Hyper Inflation Airlines

Airlines create new currency, point or miles, at no cost to them.  They sell this currency to partners, like credit cards or hotels and receive real money for their proprietary money.  United Airlines sold $2.9 billion of frequent flyer miles in 2013 and has about $4.9 billion of frequent flyer miles outstanding.  They expect 20% these miles to expire, so the mileage expiration policy creates $1 billion in profit.  They did not disclose how they value a frequent flyer mile.   

“Five million and 4.7 million MileagePlus flight awards were used on United in 2013 and 2012, respectively. These awards represented 7.7% and 7.1% of United’s total revenue passenger miles in 2013 and 2012, respectively. Total miles redeemed for flights on United in 2013, including class-of-service upgrades, represented approximately 80% of the total miles redeemed.” (UAL annual report)  20% of mileage redeemed was used for partner flights, merchandise awards, and other ground based awards. That’s a massive amount of miles chasing relatively few awards and creates a great inflation opportunity.

Costs More and More To Sit Up Front

44% Inflation over 9 Years

When I started collecting United miles in earnest, a round trip to Europe in business class was 80,000 miles.  Then it became 100,000.  Now it's 115,000 on United or 140,000 on a partner.  1,000,000 United miles was worth 12.5 round trips, but is now worth 7 trips.  This is a massive currency devaluation of 44% over 9 years.  Frequent flyers should be marching and banging pots in front of United's corporate office, but I doubt many realize their miles are worth so much less.  Most customers measure their balance by the number of miles in it.  This is a poor indicator of value though.  Viewing it as the number of awards you want (business class tickets to Europe in my example) is a better indicator of value. 

Program Changes Can Reduce Award Balance Value

Reducing Inflation Risk

Collecting miles and points creates an inflation risk.  The more you collect, the larger the risk.  Inflation can't be eliminated, but the risk can be managed.  Here are a few tactics to help support an inflation hedge strategy:

• Collect Points in Multiple Programs – All programs have inflation, but at different rates and different times.  Diversification reduces your exposure to a single program's risk.  It also creates more reward opportunities.
• Spend Points Regularly - A smaller point balance lowers the potential loss of value to inflation.  Also, why bother collecting miles if they are never used?
• Be Aware of Pending Award Price Changes - Don't be taken by surprise, read emails from your programs.  If a change is coming, book at the lower prices if able.  I booked a round trip to Europe before British Airways changed their award chart this year.
• Change Programs if Required - Most airlines have partners and one partner may have a more rewarding and stable award structure.  Alaska miles seem more stable than Delta miles and you can earn either on a Delta flight.
• Set Award Based Goals - Don't set a balance number as a goal.  1,000,000 United miles has a nice ring to it, but it isn't an end in itself.  4 round trips to Europe in business class is a better goal because it has a fixed value while the miles could change value.  Redeem when you reach your goals.
• Create A Single View of Your Assets – Take a look at your award balances on one screen.  Copy and paste into Excel or Gmail if needed.  Looking at your assets on the same page will help you understand where your risks are.  It also may help you be more creative with your awards. 80,000 Delta miles and 62,500 American miles is a round trip to Australia in business class.

American AAdvantage and US Airways Dividend Miles Account Merged

My US Airways and American Airlines mileage accounts correctly merged this weekend. The combined balance will help me spend my American balance on fun international flights with oneworld partner carriers (business or first preferred).  I don't want to pay a fortune in taxes and fees, so I'll need to fly airlines other than British Airways.  Good luck on your account merger, if it happened.  If not, there will be a process to merge duplicate accounts sometime soon.

Award Space Is Great - Carrier Fees Are Miserable

US Airways A321 First Class Review

I wanted to use my United miles for a trip to Europe before United changed their prices.  I also wanted to try the US Airways business class product before they switched from Star Alliance to oneworld.  Luckily US Airways had great availability to Europe.  I was able to book a flight from Denver to Madrid with a 90 minute connection in Philadelphia.  The trip was booked about four months in advance and included a free stopover in Brussels and an easy trip back to Denver with a direct on Lufthansa from FRA.

US Airways A321 First Class Seat

The flight from DEN to PHL was in a newer US Airways A321.  US Airways, soon to be American Airlines, has a basic first class offering on domestic flights.  There is no in flight entertainment, but WiFi is available to purchase.  The seat is acceptable, but feels a little cheap, under padded, and I was not able to take a nap.  

US Airways Airbus First Class Seat - Full Recline

The meal service on the three hour flight was much better than expected.  The first class cabin flight attendant provided attentive and friendly service.  He was so good, I filled out a US Airways online complement form for him before the aircraft parked at to gate so I wouldn't forget.  US Airways offers Dos Equis, a great option to break up the Budweiser / Miller Lite routine.  The steak was tasty and tender and everything was flavorful.  The red velvet cake was moist and springy too, a great end to a great meal (and what turns out to be the only in flight entertainment).  My dinning review is helped by never having an empty beer glass.  

Beer and Mixed Nuts Starter

Steak and Sides

Red Velvet Cake

I had a great experience with US Airways on my flight to PHL and was excited to hop onto the A330-200 to MAD and settle into the Envoy flat bed seat and experience US Airways' international business class offering.

US Airways & American Airlines Merger Thoughts

I originally though US Airways was talking about buying American Airlines to thwart AA's restructuring process then pull out last minute and create a very weak AA. I was very excited to see this fun way to cripple a competitor in action.  US suggested better terms than AA to unions and creditors throughout the process.  Then at the last minute US signed the dotted line and overpaid for an expensive operation.  Not quite as I expected.  But what does this mean to frequent flyers?

These Jets Will Need New Paint Soon

US Airways will be folded into American Airlines and the new airline will be a oneworld (still better than Skyteam) member.  This is bad news for me because I am a loyal Star Alliance flyer and soon (but not sure when) will not be able to fly US for cheap EQMs.  The merger will take a while to happen, so I'll sill get EQMs for my US flight in April.

Star Alliance Quote

Once the merger is completed, CLT and PHX will probably lose out to DFW and MIA (even though MIA is stupidly expensive and out of the way) for hub traffic, PHL should be fine.  Dividend Miles will be transferred 1:1 to AAdvantage Miles and the AAdvantage award chart will be devalued slightly.  The US award chart, with it's cheap around the world awards, will vanish.  I also won't fly the new airline if a United option exists, so none of this will bother me and I'm not interested in the on board experience.

American Jet at CLT

ANA 777-300 Business Class Flight Tokyo to LAX

After my amazing stay at the Park Hyatt Tokyo, it was time to return home.  The Narita Express was on time and check in was a breeze.  Narita airport (NRT) has some great duty free stores and I was excited to check them out.  Unfortunately, the strong Yen took all the fun out of duty shopping in Tokyo.  If it were 100:1, the prices would be great, but at 80:1 I didn’t find any deals.  I did spend my leftover money on some Hello Kitty stuff for my niece, she liked it.  

ANA 777-300 NRT-LAX

After shopping, I went lounge hopping.  First stop was the United Club.  The lounge is huge, bigger than any in the USA.  They had lots of yummy sushi (for a westerner) and a draught beer machine that pours a perfect pint.  Next up, thanks to Priority Pass form the Palladium Card, was the Korean Air lounge.  It was small and nicely decorated, good liquor, but limited food items.  Finally I visited the ANA business class lounge.  I might have been the only westerner in the place.  The lounge is large and had some good views of the field.  The snacks were more Japanese in focus, but I still enjoyed a few sushi rolls and beer.

ANA Business Class Lounge Tokyo - NRT

United Club Tokyo - NRT

I left the lounge in time to make it to the gate before boarding started.  I was really excited to fly the 777-300 (my first trip on the stretched model), fly with ANA (first time in their care), and experience a new business class (new to me and the world).  I was such an excited nerd; I even wore a Boeing t-shirt.  The seats are great.  They are in an offset staggered layout, so no one is next to you.  It feels very private and is exceptionally quiet.  The seat is a little narrow and maybe 5’10’’ long when flat.  I’m 5’10’’ so it felt a little cramped.  I was also the tallest person I saw, so I guess these were designed with the home market in mind.  The TV is large and had a good selection of movies, more than enough to keep me entertained over the Pacific.  ANA doesn’t hand out amenity kits, but has slippers waiting at your seat.  There is a basket of goodies at the small lounge in the rear of business class with eye masks, ear plugs, lotions, and a few other items.  A fun observation is the lavatories have a built in bidet system like on Japanese toilets (I didn’t try it out).  Every seat in business class was booked, but it didn't feel crowded.

ANA 777-300 Business Class Seat

ANA 777-300 business Class Flat Seat

Forward Business Class Cabin ANA 777-300

ANA 777 Business Class Leg Room

ANA Business Class Seat Storage Area

The meal and drink service started shortly after takeoff.  I opted for the western meal and a martini.  The meal was very good, but the steak was outstanding.   After the meal service ends, flight attendants won’t come by unless you ring the call button (a different method than US carriers), but they are quick to respond and friendly (again, different from US carriers).  There is a list of meals and snacks available any time on demand.  I went for a breakfast cheese burger instead of the omelet.  I also got a cheese plate to add some Roquefort cheese to the burger and try to replicate the best burger ever at The Spotted Pig in New York.  It still didn’t compare, but was still good.

ANA Business Class Western Appetizers

Delightful Steak Tender and Tasty 

Fun and Tasty Parfait Dessert 

Roquefort Cheese Snack - ANA Business Class

ANA Cheese Burger Snack, Add Some Roquefort

Once on the ground at LAX, it was a lengthy taxi to the gate, then a breeze through customs (the American citizen line was fast at least).  An earlier flight to Denver was boarding, so added my name to standby and grabbed a quick bourbon and Coke at the United Club.  I went back to the gate and waited.  I was the only standby to clear and got an exit row seat.  I was happy to trade first class for 3 fewer hours at LAX.

United Mileage Plus Merchandise Awards

There's no such thing as a bad award.  Well, as long as you are receiving more value from your miles than you expected.  Since the value of a mile different for each person (here’s my perspective on the value of a frequent flyer mile), there’s no global minimum value of a redemption for it to be good or bad.  Miles are like money and people won’t spend either on what they view as a bad value.  Some bloggers are adamant that merchandise awards are bad value and should be avoided.  They are less valuable than award flights in most cases, but that shouldn’t be taken as being a bad value. 

United Merchandise Awards Mailed Catalog

A colleague spent 50,000 United miles on a $400 watch and was pleased with the value he got from his miles.  Yes, he could have used 50,000 miles for two award tickets, each worth more than $400, but he would never buy just two tickets because he heads a family of 6 in Salt Lake.  Since his oldest kid is 6, he needs to fly direct to keep his sanity, so he flies Delta.  A nice watch sounded like a much better idea than a connection in Denver.  In absolute terms, not the best value, but in his mind it was an outstanding deal.

Update: United ran a sale on a Tumi carry on bag and I bought one.  I'm delighted with the bag and the value I received from my miles.

IDine & Other Miles for Dining Programs

Miles for nothing, that's the goal, right?  Well that doesn't exist, but there are many ways to earn miles for no marginal cost.  Mileage dinning programs are ones way to pick up miles without spending more.  Just sign up for the program(s) of your choice (see links below), register your credit cards and you are set.  When dinning at a participating restaurant, you earn about 3 miles for every dollar spent.  The miles post a few weeks after your visit; no work required on your end after signing up. I use programs for airlines I don't earn miles in frequently to have another way to reset the miles' expiry date.  You might be able to grab 1,000 bonus miles for joining too.

American Express (Earn Amex Gift Cards) Dinning Program

United Airlines Dinning Program

US Airways Dinning Program

American Airlines Dinning Program

Delta Dinning Program

Alaska Airlines Dinning Program

Priority Club Dinning Program

American and United Jets at DEN

August 2012 US Airways Miles Bonus

US Airways is running a 100% bonus on purchased mile promotion.  Again.  This promotion seems to pop up every few months.  I would not buy the miles unless you have a trip in mind.  Even then, call up reservations and have the trip put on hold before you buy miles.  I have a feeling this promotion will appear again before the year ends, so no rush.

US Airways Airbus at LGA

US Airways Star Alliance Award Blocking

I just got off the phone with US Airways reservations and am furious.  I found a flight on Swiss in business class with availability, confirmed on United.com and ANA, that I wanted to book.  The US Airways agent found the connecting flight fine, but the Swiss long haul flight came back empty.  US Airways must be blocking Star Alliance awards from their reservation system to save cash.  This is frustrating and devalues their award miles.  I'll have to call back on the first of the month and try again in Q3.

US Airways is heading backwards

What is a Point or Mile Worth?

What is a point / mile worth?  It’s a simple question with a complex answer.  A mile or point in every program will have a different value too.  Also, miles might not have any value until a certain number are collected.  Ultimately the value is different for each person, but here are my answers and how I got to them.

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.

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. 

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 – 1.75c

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.

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.

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.

Use BA Miles to Fly LAN Around South America

British Airways - .5c or 2c

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.

Southwest and US Airways Jets at ABQ

US Airways 100% Bonus on Purchased Miles

US Airways is selling miles with a 100% bonus again.  A trip to Asia in business class (or around the world award) is only $1,575.  That’s cheaper than the coach fare in some cases.  Great way to stock up on miles, but don’t sit on them too long.  US Airways has been selling miles like mad for the last few years, so this may be a prelude to an award chart change (the price of purchased miles has increased, so that may delay the points inflation).  Or they could be laughing all the way to the bank if Star Alliance awards cost them less than what they sell miles for, but only they know that.  This move also generates liquidity, so not a bad way to stay out of the bond market.

US Airways Airbus Tails at Phoenix

Offer good until June 30, 2012.  Maximum of 50,000 bonus miles can be earned with the promotion.  You need to make a Dividend Miles account before purchasing.

Around the World with US Airways Dividend Miles – Award Booking Tips

US Airways will let you fly around the world for 120,000 miles in First, 90,000 in Business, and 60,000 in coach.  The award is just their basic North America to Northern Asia, but you are allowed to route via the Atlantic and the Pacific.  You also get a free stopover (stay longer than 24 hours) in a Star Alliance hub along the way, or somewhat out of the way.  Complete Dividend Miles rules are here.  I was able to book from Denver to Tokyo with a stopover in Helsinki with all segments in business class.

Star Alliance Air Canada Jet

The first step in booking is to find the flights.  I have some time off from class in summer, wanted to go somewhere new in Scandinavia, and see Japan.  Narrowing down the possible destinations will shorten the search process and focus your attention.  I found the list of Star Alliance hubs and started looking for flights. 

The two best search tools are United.com and fly-ana.com (you need to join Mileage Club to search).  I start with United and use ANA only if I’m stuck.  United has a much simpler interface and shows more routings.  When searching on United, make sure that you are only looking at Star Alliance airlines, Aer Lingus will show in United results, but can’t be booked through US Airways.  If Aer Lingus or other airlines outside the Star Alliance keep filling the search results, switch to ANA.

Lufthansa 747

The best way to build a trip is segment by segment; being too ambitious can overwhelm the search engine.  First open a spreadsheet to track all the available flights and see all the options in one place.  From there start searching for the beginning and ending flights, NRT-DEN and DEN-European gateway city.  Flying from Japan, I wanted a lay flat bed, ANA preferred over Asiana over United.  I found several options on ANA’s new 777-300s, a pair on Asiana, and a lot on United.  To Europe I preferred Swiss (flat bed) over Lufthansa (angled) over SAS (angled) over United (flat).  I’ve flown United business class, the seat is very good, but the service and food are awful.  There were a few Lufthansa and SAS flights available, so things are looking up.  Intra-Europe connections are plentiful and have great availability if going to capital cities.  The more out of the way, the harder it is to find flights (Berlin easy, Mehamn, Norway rather difficult).

Once the bookend flights are found, it is much simpler to find the middle flights (dates and connecting cities are limited).  Through sheer force of clicking, I found several options to stop in Geneva, Oslo, Stockholm, and Helsinki.  Getting from Europe to Japan had very limited availability.  I did not want to fly Edelweiss Air (Swiss’ low cost airline with poor seats and bad service) or Air China (subpar seats and an evening arrival).  Lufthansa had a few flights, Austrian had one, and Turkish Airways had a lot from IST-NRT (but almost no options from my stopover cities to IST).  The date and timing has me on Lufthansa; I would prefer Austrian or Swiss, but the availability didn’t permit it.

US Airways, Making This Trip Possible

I found the flights I wanted and then reran the searches segment by segment before I called US Airways.  This was important because my A380 seat from FRA disappeared, so I had to find a replacement.  Luckily an A340-600 out of MUC had space and I could find a flight from Helsinki to Munich.

The reservation I had planned, DEN-FRA-HEL-MUC-NRT-LAX-DEN, met the rules and the flights were available.  US Airways agents don’t consistently interpret the rules.  If the agent says NO, just apologize, say you need to reevaluate the trip, hang up, and try again later.  I called to make the reservation and things started well.  I reached an agent quickly, gave her the flights one at a time, all were found, and the agent thought the reservation looked good.  Next the agent has to contact the rate desk to validate and price.  I was on hold, so didn’t hear what was discussed.  The agent came back and said I had to spend less than 24 hours in Tokyo or I couldn’t book the ticket.  I said I would re-plan off the phone and call back later.  I thanked her for her time, asked to have the reservation placed on hold (she did, thereby saving my flights and making it easier the next call).  This was a clear misunderstanding of what a stopover is by the rate desk.  To avoid getting the same guy again, I waited 10 hours before calling back.

United Airlines 737 Collection

My next call lasted 75 minutes and at least 60 of those were spent on hold.  I still had a positive experience thanks to the very bubbly and excited agent I spoke with.  She was new, so the US Airways culture hasn’t sunk in yet.  She quickly found my reservation, I explained what I was trying to book, she validated that it looked right to her, and then got on the line with the rate desk where things got weird.

After a few minutes on hold, I was told I could not book my trip because I was backtracking.  To make a valid reservation, I had to keep going east (my original direction of travel).  After a quick check of Google Maps, Oslo was my only option between FRA and MUC.  I quickly found flights to OSL on United.com, keeping my long haul segments in place, and she tried the rate desk again.

When my agent came back on the line, she said the rate desk now said I had to stop in a hub.  I explained both OSL and HEL are hubs for SAS (Scandinavian Airlines System) according to StarAlliance.com.  She confirmed this and went back to play rate desk lotto.

She returned excited and told me that my original itinerary with a stop in Helsinki was validated and priced out to $130.  I jumped with joy, gave her my Amex number, she booked the ticket, gave me a confirmation number, and we parted ways.

The moral of this story is twofold; first find your flights before calling, second, be patient and persistent.  

Update 2/1/15:
US Airways' new oneworld award chart isn't as generous.  It's 110,000 miles to North Asia now and 100,000 to Europe.  Also oneworld carriers have fuel surcharges (British Airways is the worst) that are added to the price of the award.

Thoughts on Around the World Travel

I was discussing around the world travel with my friend Mary at Pies Etc. the other night and an interesting contrast came up.  Mary sees round the world travel as a month long journey to explore several continents, make 8-12 stops, and fulfill romantic travel dreams.  I see it as a way to follow in the footsteps of aviation pioneers.

Mary views RTW travel as one Atlantic crossing, one Pacific crossing, and many stops along the way.  Something like New York to Africa to Europe to India to Southern Asia to New Zealand to Polynesia, then back home.  Airline alliances sell tickets for these travels (Star Alliance, oneworld, Sky Team) that give you a certain number of segments and miles flown for a fixed price.  They can be a very good value, especially if you are going on some expensive flights.  The websites are also a fun way to play at work.  Airlines also offer RTW tickets with miles, but they offer far less.  United for example allows 5 stops (but unlimited segments) and 24,000 miles flown on their RTW ticket.  The pricing is also steep, 200,000 miles in coach, 300,000 in business, and 400,000 in first.  There are award seat limitations like a normal round trip.  Depending on your trip, it may be cheaper to assemble a collection of one way award tickets.  The ease, flight availability, and value provided from the Star Alliance RTW ticket makes paying cash look very tempting. 

My view of RTW travel is based on the International Air Sports Federation, FAI, the final authority on setting aviation records.  They define Round the World as a course beginning and ending in the same location, the course must be a minimum distance of 27,000 kilometers (16,778 miles), and the course must cross all meridians.  I can accomplish that in a few days using a few airline miles, 90,000 US Airways Dividend Miles for business class actually.  Mary decided she would not want to travel in my style and lost interest in my idea, but not before laughing after thinking of me as an aviation pioneer, wearing goggles flying over a corn field.

US Airways charges 90,000 miles to fly business class from North America to North Asia (Japan, China, Korea, and some -stan countries).  They will let you fly via the Atlantic on one leg and Pacific on the other.  You also get a free stopover at a Star Alliance hub.  This award will meet the FAI requirements, be a fun way to see two cities, and a chance to experience different business class products.

I’m thinking of Tokyo and Warsaw can be my stops.  I was booked to go to Tokyo last year, but my trip was to start the morning after the earthquake, so I took United’s refund offer (the ticket was only $700 round trip from Denver through ORD, unmatched since).  My second stop has to be a Star Alliance hub and I’d like it to be in Europe (Star’s Europe hubs are Ljubljana, Athens, Thessaloniki, Heraklion, Rhodes, Larnaca, Vienna, Helsinki, London Heathrow, Brussels, Zagreb, Warsaw, Frankfurt, Munich, Duesseldorf, Copenhagen, Oslo, Stockholm, Zurich, Geneva, Basel, Lisbon, Porto, Istanbul, Ankara).  I’ve already seen a few of the cities listed and want to go somewhere new.  Warsaw works well because LOT has quite a few flights into North America with outstanding business class availability.  Austrian Airlines has good availability from Japan and to North America, but I’ve already been to Vienna (It’s amazing and I recommend it to all).  Istanbul is tempting too with almost 100% business class availability from NRT to IST, but almost nothing onward to North America (United announced a new EWR-IST flight, but no business awards yet). 

I’m using Continental’s website to find availability and piece this trip together.  Once I find the flights, I’ll need to call up US Airways to book it.  I’ve heard that I should allot an hour for that call.  I’ll let you know how it goes.

Thank You Thanks Again

I won 5,000 US Airways dividend miles from Thanks Again’s facebook promotion.  Thanks Again gives you miles for using a registered card at selected retailers.  It doesn’t cost anything to participate, so definitely sign up your cards for free miles.  Also look into the dinning program for your airline of choice and register your credit cards with them too.  I don’t recommend changing your spending habits; the rewards are only about 3 miles per dollar, but it is a nice surprise to receive bonus miles for spending you were going to do. 

It also shows that real people actually win things from facbook promos, but only participate with brands you know to avoid some major spam.

Why You Should (Almost) Never Use Points.com

Points.com is one of the worst values for frequent flyer redemptions.  The premise is that you can trade points from one program into another.  Great, except the redemption ratio isn’t 1:1 but more like 13:2.  Check out the chart below showing what I can get for my 1300 Frontier EarlyReturns miles, terrible.  There is also a trading feature so members can trade with other members.  The ratios are around 1:1, but there are fees with the transaction that make it cheaper to just buy miles from the airline. 

Points.com Exchange Example

There are three possible uses for Points.com.

• Resetting expiration dates.  You can transfer as little as 1 mile into a program.  This 1 mile will reset your 18 month expiration clock so you don’t have to worry about any large expense to generate activity if you are at risk of expiration.  It just costs 3 or 4 miles from another program and posts within a day or two.  Some programs require a minimum balance of 1,000 before you can do a transfer out.
• It lets you keep track of a lot of balances in one place.  It’s nice to see a single view of what you have, especially if you are just starting to plan an award trip.  Not all programs participate, but it will give you enough data to get started.
• Cheap hit for the US Airways Dividend Miles Grand Slam promotion.  Transferring in a mile costs 3 or 4 miles and gets you an almost free hit in the annual Grand Slam Promotion. 

Unless you are working in very small numbers, Points.com should be avoided.