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.

How to get to Southeast Asia in style

This summer I am feeling a bit antsy since for the first time in 11 years I am not doing an enormous amount of travel. I usually travel internationally (to Israel and beyond, more or less) and this time am sticking close to home with small trips on the east coast and Chicago.

That being said, it doesn’t mean I’m not allowed to dream! I’ve been eyeing some tickets to Southeast Asia just to find out how many miles they would cost and what kind of planes they would be. I reviewed some of the first-class options two days ago that was mainly using Chase Ultimate Rewards points. Here, though, I’m going to talk about using American Airlines miles, which can often be a better use of your points.

The two important things you must know are:

Screen Shot 2015-07-20 at 7.46.44 AM1) American Airlines has a great partner award travel chart. As a member of the oneworld alliance, you have access to amazing airlines like Cathay Pacific, Qatar Airways, Malaysia Airlines, and more. Their chart shows that you can get from the US to Southeast Asia (known as Asia Regions 1 and 2 in this chart) for at most 67,500 miles one-way (in first class, no less). Sometimes you can even do it for 25,000 in economy.

2) You can’t easily search these flights on the American Airlines website. To better your search capacity, using British Airways Avios search tool (it sounds weird, but it’s true).

First, you must make sure you are a member of the British Airways Executive Club (sometimes there are sign-up bonuses but don’t let that make you hesitate).

Then, you can use their search tool to ostensibly find British Airways flights, when in fact you will find all the partner flights as well. For example, here is a search from New York to Singapore on February 26:Screen Shot 2015-07-20 at 7.56.24 AM

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Or you could try using another airline on February 23:

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All these flights would be available for American Airlines mile-users. The one caveat to note, however, is that American Airlines only allows the fares listed above if traveling directly to that region. In the case of the British Airways and Qatar Airways flights, they are technically flying through an extra region to get to Singapore, so your flights would be broken up into two segments and priced accordingly.

In any case, it is important to note this method when you want to find these flights. It is hard to find them otherwise.

US Airways and American Airlines’ mileage programs are merging soon

Yesterday I received two emails – one from American Airlines and one from US Airways. See if you can spot the difference in the headline picture:

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For those not paying attention, American Airlines and US Airways are merging into a single company soon and thus their accruing programs will be as well. As part of their lead-up to the merger they are starting to bind things together within the next 30 days. You can already buy tickets on either site with miles from that program (i.e. you can buy American Airlines tickets on US Airways website with US Airways miles) and soon enough the mileage programs will merge entirely. If you have accounts with both airlines, be sure to link them by following the instructions on this View from the Wing post – it is quick and easy to follow.

One of the important aspects of US Airways that will be disappearing soon is the World Elite Mastercard they offer: very soon you will not be able to sign up for it. In order to get last-minute sign-ups, they have increased the bonus to 50,000 miles with your first purchase and the $89 fee. Since I already have this card, I received a mailing explaining how mine will soon turn into the AAdvantage AviatorRed Mastercard sometime between April and June. Just some of the benefits that are changing are listed here:

  • Instead of the 5,000 mile discount offered by US Airways, the new card offers 10% back instead (better for some award tickets, worse for others).
  • No stopovers on award tickets (US Airways used to offer one stopover, effectively leading to two plane tickets for the price of one).
  • No more companion tickets (oh well).

There are a few more changes, but these are the ones that applied to me (and probably most people).

So, as we wait to hear more information about these changes, keep in mind it’s happening, people.

How I used British Airways Avios to book a cheap trip to Toronto

In September my fiancée and I will be going to Toronto for my cousin and his fiancée’s wedding. Yes, I admit that was a confusing sentence. Suffice it to say that we needed two roundtrip plane tickets from New York to Toronto. Since we are paying for much of our own wedding at the moment we are trying to reduce costs as much as possible. I did some research and found the cheapest plane tickets at a fairly undesirable time:

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Instead of spending $215 x 2 = $430 for the plane tickets (and then $25 for checked luggage according to their website) I decided to look into spending British Airways Avios on a plane ticket for the flight. This is a well-known use in the Miles and Points community because Avios are spent on a distance-flown basis. For flights below 650 miles (like NYC->Toronto) it costs only 4500 Avios each way for an Economy ticket. BA partners with American Airlines and recently TAM for this route so I did some research and found the following flights that we are taking:

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And the greatest part of it all, it costs so little:

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In reality the price is actually $122 because I had to book over the phone (there was an error on the website). But that’s okay – we each get a free checked bag according to the rules of TAM and we will be flying a Boeing 767. This is a turbo-fan, wide-body plane as opposed to the propellor plane we would have had with Delta.

Overall a good bargain, eh? (Full disclosure, British Airways is changing their award chart on April 28, 2015).