Death of the Mileage Run?

Two days ago American Airlines announced that starting on August 1, 2016 their frequent flyer program, AAdvantage, will become revenue-based instead of mileage-based. This is a move that follows the other major carriers, Delta and United, who have done the same in recent history. It is definitely a big move as AA is the largest domestic carrier in the US and now all three of the top domestic carriers have similar rules.

With these major carriers imposing these changes, it seems that there is another nail in the coffin of the mileage run, a practice of flying to distant locations for cheap fares in order to gain miles for use at a later time. With revenue-based earning, the price of the ticket matters a lot more than the distance flown.

So what does this mean more specifically? Here is an example of a flight from New York’s JFK airport to London-Heathrow.Screen Shot 2016-06-08 at 9.16.27 PMScreen Shot 2016-06-08 at 9.16.33 PM

 

Under the former system, 100% of the miles flown would be added to the purchaser’s account in any Economy class, as shown below. Since the two airports are 3,452 miles apart (as calculated by TravelMath), the total miles earned would be 3,452 * 2 = 6,904.

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According to American Airlines’ new rules, however, for that same trip costing  $881, the number is significantly less. First of all, only the “Base Fare” and “Carrier-imposed Fees” count towards mileage determination. Screen Shot 2016-06-08 at 9.18.12 PM

So, only the $195 + $458 count, totaling $653. With the example shared on their announcement website, a low-level member of AAdvantage (read: most of us) would earn 5 miles/dollar. That totals to a whopping 653 * 5 = 3,265 miles, not even half of what was earned before.Screen Shot 2016-06-08 at 9.22.34 PM

So, with this information in mind, it’s important to consider a) if earning points from flying is actually worthwhile in the future and b) perhaps we should put our miles on foreign carriers to get more leverage from them in the future.

Win 350,000 miles on American Airlines (and get taxed for it!)

Right now American Airlines has an interesting promotion called Miles for Milestones with either no downside or a pretty strange downside. For the 35th anniversary of their AAdvantage program they are offering 35 people a chance to win 350,000 AA miles to use on any of their routes or award partner routes. In addition, each entrant earns 350 miles just for signing up.

The upsides: you could earn enough AA miles to go round-trip first class for free to anywhere in the world. Or you will definitely earn a small amount of miles to help you get to your next domestic flights.

The downside: in the terms and conditions at the bottom of the site, it lists the “total ARV of each Prize [as] $6,965.” This may sound like a windfall but it’s possible they will send you a 1099-MISC form requiring you to pay taxes on the “income” you received as part of the prize.

I would still recommend signing up for the promotion anyway because the benefits far outweigh the costs. Imagine spending 25k miles on each roundtrip flight inside the US and you would earn 13 free flights with this prize. I signed up for it this morning.

Good luck!

Admirals Club at JFK

My wife and I are currently in Florida for the weekend for a little vacation and break from the unfortunate timing of the Polar Vortex on New York City. This is the first trip in which we have been able to take advantage of my recent acquisition of the Citi Prestige credit card so I was excited to use it to access the Admirals Club in JFK terminal 8 (the one near gate 42).

We went through security uneventfully (although I was jealous of two women who had tags on their hand luggage for Etihad – I’ll get on the A380 eventually). When we got to the proper part of the terminal, I found a sign for the Admirals Club and we took the elevator up. IMG_5261 IMG_5270

We made our way up and I showed my American Airlines boarding pass (a requirement to get access to the club with the Prestige card) and the card itself. The receptionist checked my wife and I in quickly and we made our way to the lounge itself.

I took a brief look around the club before sitting down to eat some breakfast. There was a nice selection of simple breakfast items as well as plenty of space to sit. The lounge had nice armchairs as well as cafe-like areas, computer terminals to use for whatever you wanted, as well as a few iPads strategically placed around the space. There were very nice bathrooms (with one rooms labeled “showers”) and even a children’s area. The large windows facing the tarmac were a nice touch so you could follow along the various planes as they took off. My wife loved the fact that you could take magazines with you to go.

All in all, it was a nice 25 minutes we spent just sitting having breakfast instead of waiting in a large space with so many other people and no amenities. I can’t wait to use this benefit again!

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Florida and Nashville for under $600

My wife and I recently decided to use President’s Weekend to visit Florida again and – since I have a mid-Winter break as a teacher – I am continuing on to Nashville for the rest of the week. We used a variety of different mileage deals as well as knowledge of where to get discounts in order to book these tickets.

Flights to Florida
I searched a variety of methods including using British Airways Avios to book an American Airlines flight for 7,500 Avios per person but unfortunately the availability was just not there. There were a few business/first class flights but since their devaluation last year, it was no longer worth it (15K for the one way, not it’s 30K). In the end, I found availability using American Airlines miles themselves under their “Economy AAnytime” category which was only 20K per person. I had 32K available personally but my wife had 7K available to transfer. The cost was about $80 (annoying) and I had to buy the last 1K at a cost of $50. Baggage is free since this is an award ticket. Total cost: $130 (for miles) + $11.20 (Sept. 11th fees) = $142.50

Rental car in Florida
I don’t often use these deals, but I received a notice in my email from American Airlines that we could earn 6 times the normal mileage for renting through Hertz using certain codes sent to me via email. That’s exactly what we did, so for total cost of under $200, we got our three day rental. Total cost: $197.

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Housing in Florida
This is the cheapest part. My parents have a condo in Delray Beach. If you have family members who have places to stay in Florida, take advantage of it. Instead of spending any hotel points or money to stay in an AirBnB or something like that, it was free. Total cost: $0.

Return flights
My wife is returning to New York on February 16 and I am continuing on to Nashville to explore a city and state I’ve never been to! I found a return ticket for her using United because we received travel vouchers for $150 due to our complaint a few weeks ago on our last trip to Toronto. I found a deal for $211.10 (pretty good) on her return fare. We have the MileagePlus Explorer card, so baggage is free for the first two travelers. Total for her flight: $211.10 – $150 = $61.10.

As I mentioned, I am continuing travel to Nashville for three more days of relaxing break. I found a deal with Southwest Airlines for a direct flight using a ridiculously small amount of points: 6,699 for the one-way. Since we have more than enough Chase Ultimate Rewards points right now, I transferred 5,000 (I already had about 1,900 in my account) and booked the ticket. Total cost: $5.60 (Sept. 11th fee again).

Housing in Nashville
I did some searching using the various hotel points we have and found a good deal with Hilton Hotels for a Hampton Inn at the Grand Ole Opry in Nashville. For only 30,000 points/night I could book my three nights for free! The only snag was that I only had 80K. I researched the cost of the extra 10K points and found out it would have been another $100 to buy the points necessary.

Instead, I looked at some of the transferable options that I have access to. I shied away from using our Chase Ultimate Rewards point as we want to use that for a return flight for our honeymoon. Instead, I realized that I have had a few thousand Citibank ThankYou points lying around a checking account for years. I looked at their list of transfer partners and – low and behold – Hilton is one of them! At a ratio of 1.5:1, I transferred 7K for a redemption of 10.5K – exactly what I needed. Total cost for my hotel: $0. 

Rental car in Nashville
This purchase was deceptively simple. I usually use a website called RentalCarPerks for specific codes that have offers for Hertz, Avis, Budget, and more. Instead, Enterprise had the best offer – an intermediate SUV for $120. Yes, that was the cheapest option (not the compact or economy – those were more expensive). Total cost of car rental: $120.47

Return flight from Nashville
I used my own United voucher on a flight I found for $175.10. Again, having the United credit card allows for free baggage. Total cost for flight: $175.10 – $150 = $25.10

OVERALL TOTAL COST: $557.77

Pay money to get money on Citi Prestige

Last month I signed up for the Citi Prestige card in accordance to advice from travel bloggers like The Points Guy. Even though it comes with a hefty $450 annual fee the money you get back from it makes the entire fee worth it in the first year. I might get rid of it after that but for now it’s quite useful. Especially since after $3000 of spending you earn 50,000 ThankYou points that can be transferred to 11 airlines worldwide.

The first benefit I used is in preparation for my honeymoon this summer – the Global Entry travel credit. Once I signed up for the service and it posted onto my account, I saw a statement credit three days later in the exact amount of the payment. Unfortunately it only applies to the primary card holder (not authorized users) but that is still money saved.Screen Shot 2016-01-09 at 11.15.28 AM

Then my wife and I started booking flights for trips in the upcoming year. The Citi Prestige provides $250 airline credit for each calendar year, so by booking flights in December 2015 and January 2016, we get $500 in return for plans we were going to make anyway! Just today I checked my statement for one of the credits posted:

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It usually takes 1-2 billing cycles for these credits so I await the other credit in our February statement.

Finally, one benefit we have not used yet: access to American Airlines lounges and a Priority Pass account. There are many of these across the country and the world so we look forward to spending time in them in the upcoming year of travel.

When buying miles is a good or bad idea

One of the ways frequent flyer programs make money is to offer their members to purchase miles at various rates. Sometimes there are even bonuses (like the current one offered by American Airlines). It is usually not the best idea to purchase miles for yourself since you will end up paying more for a flight with those miles than if you bought the ticket outright. Additionally, there are usually more direct flights when purchasing with cash (rather than miles) so you get more comfortable options also.

That being said, there are some times when it makes sense to buy miles outright:

  1. You are almost at the threshold to purchase an award ticket and just need a bit more to get to the requirements. For example, flying to Bali on Korean Airlines is 95,000 miles one-way for their fantastic first class product. If you only had 80,000 miles in your account, you could get that ticket by paying some cash for the 15,000 more miles you need. That would save money on the $18,000+ flight if you bought the ticket in cash.Screen Shot 2015-08-11 at 2.24.38 PM
  2. When the cost of the miles is less than the approximate value thereof. For example, if the value of AAdvantage miles is 1.7 cents/mile and you can buy them for 1.4 cents/mile, it would make sense to buy them and keep them banked for future use.
  3. You really really want to take a certain flight and the value of the ticket is worth it for the miles you would buy. For example, if a certain first class flight was $18,000 and to buy the miles would cost only $2,500, then go for it (that is, if you have the money).

Sometimes it makes sense to buy; most of the time it doesn’t. Just keep up with what you have in your account and what upcoming travel you expect to determine your best course of action.

Great flight deals right now on United, American, and Southwest airlines for $40 one-way

There are some truly amazing deals on flights to/from a few places around the country right now. I, myself, am eyeing the tickets to/from Chicago on Southwest Airlines because you can get them for 1,751 points one way!Screen Shot 2015-07-30 at 5.03.43 PMOf course, you might want to see a more comprehensive list so I recommend reading DansDeals’ post on this phenomenon and get on it right away! The only thing to consider is that these deals are mostly for departures on Tuesdays, Wednesday, and Saturdays. Keep that in mind.