Things used to be simpler: you’d earn miles, find availability for a ticket to Hawaii or Key West, book it an enjoy free flights starting at 25,000 miles roundtrip inside the U.S. As technology continues to improve our lives and make things simpler, airlines have chosen the opposite path, making their loyalty programs so complex that experts like me are needed to make the most of them.
A classic case in point is using your miles for flights. It used to be that you would find award availability or not, and that determined whether you could use your miles for a ticket. While that system is still in place for many major airlines, including Alaska, American Airlines, Delta and United, some airlines are now adding a second option, usually called “pay with miles” or similar. It’s an alternative – and less valuable – way to use your miles for flights.
These “pay with miles” options are never to your benefit. The airline will promise that you can use your miles to book any seat on a flight (which is true). What they are not telling you is that they are fixing the value of your miles at a very low rate. Here’s an example from international carrier Singapore Airlines.
Do you want to pay 87,000 or 742,000 miles?
In Singapore’s KrisFlyer program, flying one-way from San Francisco to Seoul in first class costs 87,500 miles at the saver (i.e lowest) redemption level. Since the cost of the flight is about $5,473, that is a good mileage redemption value of 6.3 cents per mile. It might take some work to find a flight with award availability on a date you want to travel, but that’s the game, and that’s where the value is.
By contrast, there’s an option with Singapore Airlines where you can pay for part or all of a ticket with your KrisFlyer miles. The amount of miles you’ll need depends on the cash cost of the flight. In this case, the flight we could have booked for just 87,500 miles would cost 742,252 miles, 8.5 times as much! Instead of 6.3 cents per mile in redemption value, you’d be receiving a paltry 0.7 cents per mile – yes, less than one cent per mile in value. Which option do you think the airline would rather you choose?
Bottom line: Don’t fall for marketing hype about being able to book any flight with your miles. If the airline (or credit card – I’m looking at you, Capital One) fixes the value of your points during redemption, you’re not getting the best deal available. And sometimes – like with the Singapore Airlines example above – you are getting ripped off.
Among U.S-based airlines, Delta offers this “pay with miles” option most prominently, so be aware when looking to redeem your SkyMiles.
It may not always be simple or easy to find award availability, but with such a large disparity between these two options it is more than worth the effort.