Category: free

Why I sometimes earn miles with airlines I’ll never fly

Why I sometimes earn miles with airlines I’ll never fly

At the time of writing this, I recently got off a flight from San Jose to Boston via Denver on United Airlines. I was lucky enough to score a great last minute deal, booking it for just $137, despite it being a nearly 3,000-mile journey.

Now, in a more simpler era, airlines had the very simple policy of giving you one mile earned for every mile you flew. Unfortunately, itineraries like the one I booked above meant that the airline would give away a lot of miles without earning much money. In contrast, (business) travelers who often booked very expensive short-distance (often last-minute) itineraries would not earn very many miles, creating a disincentive against a behavior that is very profitable for the airline.

Consequently, over the past three years, the Big Three airlines (United, Delta, and American) have all made the switch to what is known as revenue-based earning, where the number of award miles earned correlates with the amount of money spent on the ticket, rather than the amount of miles flown. Southwest, JetBlue, Virgin America, and Sun Country have always operated this way, leaving Alaska, Frontier, and Spirit as the only domestic airlines that still award miles based on distance flown rather than money spent (though there is rampant speculation that Alaska may be switching away from this, and redeeming miles and Frontier and Spirit is an exercise in frustration).

With the Big Three airlines, they now award you miles equal to five times the price of your airfare before taxes, assuming you don’t have any status. So for the itinerary I booked recently on United, despite flying 2,705 miles, I would have only earned 535 United award miles:

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Considering that domestic one-way awards on United start at 10,000 miles (for trips under 700 miles), this means that I won’t have enough award miles to redeem for a free trip until I’ve spent $2,000 on airfare!

If that sounds like a lot of money to spend in order to book a free flight that often prices for under $100, it is!

The good news is that given United’s membership in the Star Alliance, you can choose to earn miles with any of the 27 airlines in the Star Alliance, or one of their non-alliance partners like Aer Lingus.

And while the other airlines would love to also award miles based on how much you spent on United, for obvious reasons, they do not have that data, nor is United going to provide it to them. So they have no choice but to award miles based on how far you fly. That being said, not all tickets will earn miles at the same rate. And that’s not just whether you’re flying in first, business, or economy – even within economy, not all tickets earn at the same rate.

I’m not going to get into a detailed explanation of airline fare classes given how complex a topic is, but what it comes down to is that airlines sell there tickets in different fare “buckets”. Availability of those buckets varies depending on a number of factors, which is also why the person next do you on your flight may have paid a different amount for the same flight.

Somewhere on your ticket there should be a letter indicating the class; in my case it was “G”:

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Thanks to the very helpful website wheretocredit.com, I can now see how many miles I’ll earn on a G fare on United Airlines:capture

Knowing that my flight is 2,702 miles (which I can see from the “PQM” field above), I know that if I credit to Singapore Airlines, I can earn 100% of those miles flown, or 2,702 miles with Singapore Airlines’ KrisFlyer program. As you can see from the chart, my flight will earn the most miles on Singapore Airlines (as it turns out, almost all United flights will earn 100% on Singapore Airlines).

Of course, that’s not to say you should always credit miles to the program where you will earn the most miles, as intuitive as that may seem. Before deciding where to credit your miles, you should first look at the award chart of the airline you want to earn miles on to see how many miles you would need for an award. In this case with Singapore Airlines’ award chart, I can see that a round-trip flight within the United States (which would be on United) booked through Singapore Airlines is 25,000 miles, or, the same as it would cost if I were booking with United miles:

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But that’s not the only thing to consider. You should also think about how easy it is to accrue these miles. In this situation, I know that I can transfer my Starwood Preferred Guest points, Citi ThankYou Points, AMEX Membership Rewards, or Chase Ultimate Rewards to Singapore Airlines if I encounter a situation where I need more miles to book an award. Furthermore, you also should be aware of any taxes and fees that airlines may add on to your ticket – in this case I know that none would be added for a domestic flight on United Airlines, but Singapore Airlines can sometimes add on thousands of dollars in fees for first-class redemptions on Singapore Airlines.

But let’s say instead this flight earned 75% on Singapore Airlines and 100% on Ethiopian Airlines. Given that there is no other way to accrue Ethiopian Airlines miles other than flying Star Alliance airlines, I might still lean toward earning on Singapore Airlines. Furthermore, you should look to see how easy it is to redeem miles in the program you are earning with. While I know that it is relatively easy to redeem Singapore Airlines KrisFlyer miles (it does require a phone call if you aren’t booking on Singapore Airlines itself), I might be a little bit more skeptical about doing something like crediting all of my Delta Airlines flights to Czech Airways; while Czech Airways generally earns the most miles for Delta flights (usually 100%), a brief search for stories about redeeming those miles indicates it’s nearly impossible.

I should also mention that this strategy should only be used by people who are not trying to attain status with a particular airline. In order to do so, you need to be crediting all your flights to the same airline, and then based on how many miles you fly, you may be able to earn status with that airline, even if you don’t earn nearly as many actual redeeemable miles. As someone who rarely pays for a flight though, airline status (which requires paid flights) has never been something I’ve prioritized too much. Furthermore, all of the calculations about miles earned are assuming you don’t have status – if you do have status, then you’ll need to factor in any multipliers when determining miles earned.

 

Did I miss something? Have a question? Let me know!

 

Cover image: Marina Bay Sands Hotel in Singapore, courtesy of marinabaysands.com

 

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Don’t hoard your miles and points!

Don’t hoard your miles and points!

The Chase Sapphire Reserve has quickly become one of the most popular credit cards of all time, so much that Chase actually ran out of metal cards.

And now that many people’s 100,000-point Ultimate Rewards bonuses have started to post, I’ve talked to many people who are treating this like some untouchable emergency reserve (no pun intended), only to be used for the absolute best travel experiences, and paying cash for everything else.

The thing is, these 100,000+ points (currently worth $1,500 in travel) are not like putting $1,500 in a savings account, the value of which will grow slowly over time, or an investment account, the value of which will likely grow relatively quickly over time, with the potential for losing value. The value of these 100,000 points will only decrease the longer you hold off on using them.

Why? Because unlike in a savings account, when $1,500 is worth $1,500 no matter whom you bank with, the value of your points is determined by the company issuing them, in this case Chase.

So right now, while each point is worth 1.5 cents when redeemed for travel, Chase could easily decide at any point that they are worth 1.3 cents when redeemed for travel, which would instantly decrease the value of your 100,000 points by $200. If this sounds familiar, it’s because Citi recently made similar changes to its competitor Citi Prestige card, decreasing the value of points redeemed for American Airlines flights from 1.6 cents per point to 1.25 cents per point. Thankfully, they gave almost a year’s advance notice when doing so, but companies are not always as generous when making changes, such as when Alaska Airlines overnight raised the price to redeem MileagePlan miles for first class flights on Emirates.

Furthermore, with Chase announcing that they lost $200 million in profit due to Chase Sapphire Reserve signups, some analysts are already speculating that this is a sign that it is not sustainable for Chase financially.

But furthermore, even if Chase keeps the value of their Ultimate Rewards points for Reserve cardholders at 1.5 cents per point when redeemed for travel, there’s no guarantee that its transfer partners won’t make a change to their chart.

Right now 100,000 points transferred to United could get you four roundtrip nonstop flights between the East Coast and West Coast, at 25,000 per roundtrip flight. But United could suddenly decide to raise that to 35,000 per roundtrip flight, meaning that those 100,000 points wouldn’t even get you three flights anymore. Or maybe United doesn’t change the price of its awards, but rather negotiates a 5:4 transfer ratio instead of 1:1, meaning that 100,000 Ultimate Rewards gets you 80,000 United MileagePlus miles instead of 100,000.

Another popular redemption is transferring to Singapore Airlines for their amazing first-class Suites product, which tend to run for just under 100,000 KrisFlyer miles (which can also be transferred 1:1 from Ultimate Rewards) one-way plus taxes and fees. But it’s also one of the hardest awards to find availability on. And Singapore could also take the route of Air France at any point, deciding to no longer allow award redemptions for their first-class product anymore.

So while I know it’s tempting to save up your points for an “aspirational” flight or redemption (no doubt made popular by all the bloggers talking about such flights), the reality is that by the time you have the chance to use them that way, they might no longer be worth as much (or even be able to be used in that way).

In other words, if you have a chance to use your points (within reason obviously), just use them.

The really easy way to get free access to some of the best lounges in the world for at least a year

The really easy way to get free access to some of the best lounges in the world for at least a year

At one point in my life, I used to think that airport lounges were only for business travelers who flew every week, and figured it was something I would probably never get to experience.

I finally did get to experience my first airport lounge several years ago, when I was able to use one of the lounge passes that came with my United MileagePlus Explorer card to experience the Singapore Airlines lounge at the Taipei-Taoyuan airport. (I would not actually recommend applying for the card through that link, as there are routinely higher offers of 50,000 miles).

Unfortunately, having two lounge passes a year with limited use wasn’t really going to cut it with my travel schedule.

Thankfully, I discovered the American Express Platinum Card from Ameriprise. Now, some of you may have heard of the AMEX Platinum Card before, given its reputation as a fancy, high-end card. But you may have been turned off by the annual fee of $450. Luckily there are several different types of Platinum cards, and the Ameriprise-branded one does not come with an annual fee the first year (and despite the terms and conditions saying otherwise, you do not need to have an Ameriprise account to be eligible for one).

Now, the Platinum Card is awesome for many reasons, but let’s focus on the lounge access for this post. With the card, you get access to:

All American Express Centurion Lounges, which have kitchens run by high-end chefs that will prepare buffets with amazing gourmet food (like the braised chicken and other items below, from the lounge in Las Vegas), and a bar with incredible mixed drinks.

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All Priority Pass lounges, a global network of over 900 lounges in most major airports in the world, including 13 of the top 15 airports in the US (sorry Denver and Charlotte). Now, to be fair, these generally aren’t as nice as the Centurion lounges, and can vary widely in quality. The Priority Pass lounge at the Seymour Airport in the Galapagos consists of just a couch with free chips, coffee, and juice (though the fact that this airport even had a lounge was shocking to me). On the other hand, the Airport Wellness Oasis Lounge at Singapore’s Changi Airport offers complimentary fish spa massages (definitely try it if you haven’t) in addition to a wide range of food and drink. But for the most part, a Priority Pass Lounge will usually give you complimentary soft drinks, juices and certain alcoholic drinks, hot and cold food that doesn’t require much preparation, and free wi-fi (like the Air Canada Maple Leaf Lounge at LAX pictured below). And even the most limited lounges are still often better than the noise of the airport terminal where nothing is free.

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All Delta Sky Clubsif you’re flying Delta. Out of the three major US carriers (United, American, and Delta), I find that Delta generally has the best lounges. Again, they’re no Centurion Lounge, but they’re generally very modern, clean, and offer a decent selection of food and drink. (I’m quite excited to try the one at JFK next week which has a roof deck).

All Airspace loungesa weird network of four fairly subpar lounges at SAN (San Diego), JFK (New York), BWI (Baltimore-Washington), and CLE (Cleveland). When you enter, they give you a $10 credit that you can use, as nothing is free. The one at the San Diego Airport is nice enough, especially as you can watch planes taking off, but I’d avoid the one at JFK in favor of the much nicer Priority Pass lounges there in other terminals.

 

Now as you may have noticed in the title, I said “at least a year” of free access. Yes, if you hold on to the card for more than a year, you will be billed a $450 annual fee. However, one of the other benefits of the Platinum card is that you get $200 in airline credit per calendar year (i.e. if you get it now, you would get $200 now, then be eligible for $200 again on January 1). So if you spend at least $400 on airfare per year, the annual fee almost pays for itself the next year (though actually getting the credit can be a complicated process with very specific requirements, well-detailed on FlyerTalk). On top of that, you get a $100 one-time Global Entry credit, which is also good for TSA PreCheck. Essentially, you have no annual fee the first year and $500 of benefits, which will more than cancel out the annual fee the next year. Not a bad deal. And once you start regularly flying with TSA PreCheck, Global Entry, and frequent lounge, you’ll realize you don’t dread airports as much as you used to, and it might be hard to go back to old ways.

 

One important caveat though is that other than the Centurion and Airspace lounges, you will have to pay for any guests you bring with you to the Priority Pass lounges. If you regularly travel with guests (like a family) and want to make sure they can also get in for free, you might want to consider the Citi Prestige card, which allows you up to two guests for free (or more if family) at all Priority Pass lounges and American Airlines Admirals Clubs if you and the guests are flying American. Of course, it is good for many other reasons too.

 

Have a question about something? Feel free to email me or post in the comments.

 

Pictured above: The Virgin America Loft at LAX, a lounge which looks very nice, but overall lacks substance.