This is the thirty-fourth post in a monthlong series that started here. Each post will take about two minutes to read and may include an action item that takes the reader another two minutes to complete. I am writing this for an audience of people who know nothing about frequent flier miles, and my goal is that by the end, you know enough to fly for free anywhere you want to go. Previously Name Your Own Price on Priceline to Save Hundreds on Hotels (Part 2).

The Mile Value Calculator is one of this site’s most important contributions to the world of frequent flier miles. Before making any redemption, you should check its value with the calculator. Before deciding whether to purchase with cash or miles, you should check which is a better deal with the calculator. While putting your own value on AAdvantage miles or Avios, you should use the calculator.

Now that you’re nearing the end of your crash course on miles, it’s important to know how to use it properly. The following is an excerpt from the very first blog post I published. It explains what to plug into the four text boxes in the calculator with three examples:

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Frequent Flier Miles Value Calculation

  1. Ticket Value- For the ticket we are acquiring with miles, we need the lesser of the ticket’s value to us and the ticket’s cost.
    • Example: A coach one-way ticket from LAX-PIT costs $200. Bill is flying to Pittsburgh to propose to his girlfriend, so he values the ticket at $5000. For the formula, we use the lesser of the cost ($200) and the value ($5000), so we plug in $200.
    • Example: Jacqueline lives in San Francisco and decides at the last second to go to Atlanta to watch UVA basketball play in the ACC Tournament. On the way, she wants to stop in Minneapolis to visit family. Last second tickets from SFO-MSP-ATL-SFO cost $1213. Jacqueline is not a rabid fan and sees her family several times a year, so she only values the chance to go take this trip at $450. For the formula, we use the lesser of the cost ($1213) and the value ($450), so we plug in $450.
    • Example of Premium International Travel: The most common time the cost and value diverge are for international first class travel. Jeff lives in Los Angeles and wants to book his dream vacation to see the Australian Open with a little exploration of Australia thrown in. He is also an expert on maximizing AAdvantage miles, so he knows he can get a free stopover in the international gateway city for as long as he likes. So he books JFK-LAX (June), LAX-SYD (January), MEL-LAX (January), and LAX-MIA (March). The transpacifics are in Qantas first class on A380s; the transcontinentals are on AA first class on 777s with fully flat seats. He plans on using the transcontinentals as half his airfare for upcoming vacations to New York and Miami. In cash, this itinerary would cost $25,700. To figure out his subjective value, Jeff looks at the cost of this itinerary in coach, which is what he would book if he had to use cash. The cheapest Australia itinerary in coach costs $1225, but it includes stops and is over 40 hours one way. Jeff values his direct flights $400 more than that and his first class a further $600 more. So he values the Australia part at $2225. He values the other first class legs, using the same process of finding the applicable coach fare and then adjusting for his valuation of first class and routing, at $700 total. So for the formula, we use the lesser of the cost $25,700 and his value ($2925 = $2225 + $700), so we plug in $2925.
  2. Taxes and Fees Associated with an Award Booking- Include all taxes, award booking fees (US Airways), phone ticketing fees, close in ticketing fees, and any other fees. This number should be easy to find, since it is the total amount the airline is trying to charge your credit card.
    • Bill purchased his flight within 21 days of departure online. United hits him with a $75 close in ticketing fee and $2.50 in taxes, so his total taxes and fees associated with the award booking are $77.50
    • Jacqueline purchases online and Delta does not charge close in ticketing fees. Her total taxes and fees are $7.50.
    • Jeff has to call a phone rep to book Qantas flights with AA miles. AA charges him a $25 phone fee plus taxes of $128. His total taxes and fees are $153.
  3. Miles Used- How many miles will the trip we are considering cost?
    • Bill found saver award space for the date he wanted. His trip cost 12,500 United miles.
    • Delta allows free stopovers domestically in cities that are along a legal routing. It is legal to route SFO-ATL through MSP. Because Jacqueline found low level availability on delta.com for her entire itinerary (she has magical powers), her total cost is 25,000 SkyMiles.
    • Jeff’s LAX-Australia roundtrip in Qantas first costs 145,000 AAdvantage miles. He craftily added the transcons in fully flat seats for no additional miles. Total: 145,000 miles.
  4. Miles Foregone by Not Purchasing Ticket- Use the Great Circle Mapper to calculate how many miles the trip would earn in coach if you paid the fare. Add in any mileage earning bonus you would receive if you have status on the airlines you are flying. Use the miles earned in coach even if your award is booked in first classunless you would have paid for a first class seat in cash if you had not used miles.
    • Bill’s PIT-LAX is 2136 miles, so he is forgoing 2136 miles by not purchasing his ticket with cash.
    • Jacqueline’s routing is 4634 miles, but she is a Delta Diamond Medallion flier, so she would earn a 125% mileage bonus on her miles flown if she purchased the ticket with cash, so she is foregoing 10,426 (4634 + 1.25*4634) miles by not purchasing the ticket with cash.
    • Jeff’s megatrip is 20,226 miles of flying, which is how many he’s foregoing by not purchasing the ticket with cash.

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I use the calculator daily, and I hope you will use it regularly now also. You can find it under the resources tab on the menu above.

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United allows one free stopover on roundtrip awards. I’ve discovered and posted extensively on how this free stopover can be turned into a free oneway. See Free Oneways on United Awards.

A free oneway is a oneway trip to your home airport before your main award or from your home airport after your award. To unlock a free oneway, you need to conserve your United award’s free stopover.

Why? Because you need to take that free stopover at your home airport. Take a look at these two examples of a free oneway, and you’ll see that they rely on a free stopover at the home airport:

MIA-JFK (free oneway, stopover at JFK, home airport)

JFK-FRA (destination is Frankfurt)

FRA-JFK (return home)

and

JFK-FRA (destination is Frankfurt)

FRA-JFK (stopover at JFK, home airport)

JFK-SFO (free oneway)

The first itinerary has a free oneway from Miami to New York City before the main award. The second has a free oneway from New York City to San Francisco after the main award. Both rely on using the one and only free stopover on United roundtrip awards at JFK, the home airport in this example.

The fact that a free oneway relies on a stopover at your home airport means you can either get a free oneway OR a free stopover on your main journey–not both.

How do you choose between them? Simple math. Let’s use as an example a trip where Sam wants to see two cities in Europe–Copenhagen and Frankfurt–and would like a free oneway to Hawaii.

This award is impossible because it has two stopovers:

April 1 SFO-CPH

April 8 CPH-FRA

April 15 FRA-SFO

July 11 SFO-HNL

The stopovers are Copenhagen and San Francisco, with Frankfurt as the destination of the outbound and Honolulu the destination of the return. Remember that Sam can’t have two stopovers, so he has a choice. Keep the CPH-FRA leg or keep the SFO-HNL leg and cut the other.

Cutting either would work:

April 1 SFO-CPH

April 15 FRA-SFO

July 11 SFO-HNL

Cutting CPH-FRA leaves one stopover–just SFO–in addition to the outbound’s destination of Copenhagen and the return’s destination of Honolulu.

Or he could cut the free oneway at the end:

April 1 SFO-CPH

April 8 CPH-FRA

April 15 FRA-SFO

This is easy to see. It’s a roundtrip with a stopover in Copenhagen.

Which should Sam cut? That depends on a number of factors.

1. Is there a difference in the miles price?

I was being a bit breezy when I called the oneway at the end a “free oneway.” United treats Hawaii as a separate region from the continental US, so the oneway may or may not be free.

The oneway at the end of the award to Hawaii will cost the difference between flying back from your destination to the continental US and flying back to Hawaii. This depends on what region you choose and what class of service. For example:

When returning from Europe in economy, adding a oneway to Hawaii adds 2,500 miles.

When returning from Europe in business, adding a oneway to Hawaii adds 7,500 miles.

When returning from Europe in first, adding a oneway to Hawaii is free!

Check out your region and class of service on the interactive United award chart.

In Sam’s case, if he cuts SFO-HNL, his award is 60k miles. If he cuts CPH-FRA and keeps the Hawaii oneway, it will cost 62.5k miles.

2. What is the difference in taxes?

Keeping the intra-Europe segment results in taxes of $184. Keeping the oneway to Hawaii leaves total taxes at $159.

3. What is his value of the chosen and cut flights?

I said value not price. I would define value as the lower of price and your subjective value. This is an important consideration if you’re planning on taking two vacations no matter what, so that what you don’t add to the award, you’ll have to purchase.

SAS is selling the direct CPH-FRA flight we might have to cut for $91 on Sam’s date.

And Hawaiian is selling SFO-HNL on July 11 for $314:

If those are his values, for the flights, all other things equal Sam would prefer to keep the more expensive SFO-HNL flight.

When valuing a premium class itinerary remember that while domestic first class in the USA is just a big recliner, it’s actually much better than business class intra-Europe, which is just an economy seat with the middle seat empty.

Also, don’t forget to cap the value of the flights at the cost of getting an equivalent award. If you can replace an intra-Europe leg for 4,500 Avios that is selling for $400, don’t value it at $400–something like $70 would be more appropriate.

4. What are the miles earned for the taken or cut flights?

If Sam is going to buy the flight he cuts, he would earn 2,399 miles flying SFO-HNL and 423 from CPH-FRA.

You might notice that the four things to consider are roughly the same as the four entries into the Mile Value Calculator. That’s not a coincidence. And instead of doing any math after thinking about the four factors, we’ll instead plug the two possible awards into the Mile Value Calculator.

Plugging in both awards, we’ll get a cents per mile (CPM) valuation for each award. This CPM valuation will take into account all of the above factors and all of our subjective preferences. The award that gets a higher CPM is the better award. Ticket that award, and purchase the flight(s) you had to cut with cash or a separate award.

Let’s say that Sam values SFO-CPH and FRA-SFO at $1,000. He values the other possible segments at their costs–$314 for SFO-HNL and $91 for CPH-FRA. With that information, we can go to the calculator.

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Plug 1314, 159, 62500, and 14219 into the calculator to get the value of the award that includes the oneway to Hawaii and cut the intra-Europe leg.

Plug 1091, 184, 60000, and 12244 into the calculator to get the value of the award that includes the intra-Europe segment but cuts the oneway to Hawaii.

For both of these, I got the Miles Foregone by looking at the distance of the award as constructed on gcmap.com.

The Mile Value calculator tells us that given the miles price, tax price, Sam’s subjective valuations, and the routings, Sam comes out ahead by cutting CPH-FRA from the award and buying it with cash and keeping SFO-HNL in the award.

The award with SFO-HNL gets 1.51 cents of value per mile. The award with CPH-FRA gets only 1.26 cents per mile.

This is hardly surprising since a trip to Hawaii usually costs more than a trip within Europe. In general, I advise people to buy intra-Europe or use Avios where appropriate to preserve their free oneway option.

Recap

You only get one stopover on a United roundtrip award–zero on a oneway. Since you need to preserve that stopover to construct a free oneway, you can either get a stopover on your main award or a free oneway.

I laid out the considerations to choose between the two options. The real trick though is to value each of your two possible awards in the Mile Value Calculator. Ticket the award that earns a higher CPM, and purchase the legs you had to cut with cash or a separate award.

Hey there, you’re reading an outdated post! The updated series from March 2013 can be found here.

This is the twenty-ninth post in a monthlong series. Each post will take about two minutes to read and may include an action item that takes the reader another two minutes to complete. I am writing this for an audience of people who know nothing about frequent flier miles, and my goal is that by the end, you know enough to fly for free anywhere you want to go.

The Mile Value Calculator is one of this site’s most important contributions to the world of frequent flier miles. Before making any redemption, you should check its value with the calculator.

Before deciding whether to purchase with cash or miles, you should check which is a better deal with the calculator. While putting your own value on AAdvantage miles or Avios, you should use the calculator.

Now that you’re nearing the end of your crash course on miles, it’s important to know how to use it properly. The following is an excerpt from the very first blog post I published. It explains what to plug into the four text boxes in the calculator with three examples:

Frequent Flier Miles Value Calculation

  1. Ticket Value- For the ticket we are acquiring with miles, we need the lesser of the ticket’s value to us and the ticket’s cost.
    • Example: A coach one-way ticket from LAX-PIT costs $200. Bill is flying to Pittsburgh to propose to his girlfriend, so he values the ticket at $5000. For the formula, we use the lesser of the cost ($200) and the value ($5000), so we plug in $200.
    • Example: Jacqueline lives in San Francisco and decides at the last second to go to Atlanta to watch UVA basketball play in the ACC Tournament. On the way, she wants to stop in Minneapolis to visit family. Last second tickets from SFO-MSP-ATL-SFO cost $1213. Jacqueline is not a rabid fan and sees her family several times a year, so she only values the chance to go take this trip at $450. For the formula, we use the lesser of the cost ($1213) and the value ($450), so we plug in $450.
    • Example of Premium International Travel: The most common time the cost and value diverge are for international first class travel. Jeff lives in Los Angeles and wants to book his dream vacation to see the Australian Open with a little exploration of Australia thrown in. He is also an expert on maximizing AAdvantage miles, so he knows he can get a free stopover in the international gateway city for as long as he likes. So he books JFK-LAX (June), LAX-SYD (January), MEL-LAX (January), and LAX-MIA (March). The transpacifics are in Qantas first class on A380s; the transcontinentals are on AA first class on 777s with fully flat seats. He plans on using the transcontinentals as half his airfare for upcoming vacations to New York and Miami. In cash, this itinerary would cost $25,700. To figure out his subjective value, Jeff looks at the cost of this itinerary in coach, which is what he would book if he had to use cash. The cheapest Australia itinerary in coach costs $1225, but it includes stops and is over 40 hours one way. Jeff values his direct flights $400 more than that and his first class a further $600 more. So he values the Australia part at $2225. He values the other first class legs, using the same process of finding the applicable coach fare and then adjusting for his valuation of first class and routing, at $700 total. So for the formula, we use the lesser of the cost $25,700 and his value ($2925 = $2225 + $700), so we plug in $2925.
  2. Taxes and Fees Associated with an Award Booking- Include all taxes, award booking fees (US Airways), phone ticketing fees, close in ticketing fees, and any other fees. This number should be easy to find, since it is the total amount the airline is trying to charge your credit card.
    • Bill purchased his flight within 21 days of departure online. United hits him with a $75 close in ticketing fee and $2.50 in taxes, so his total taxes and fees associated with the award booking are $77.50
    • Jacqueline purchases online and Delta does not charge close in ticketing fees. Her total taxes and fees are $7.50.
    • Jeff has to call a phone rep to book Qantas flights with AA miles. AA charges him a $25 phone fee plus taxes of $128. His total taxes and fees are $153.
  3. Miles Used- How many miles will the trip we are considering cost?
    • Bill found saver award space for the date he wanted. His trip cost 12,500 United miles.
    • Delta allows free stopovers domestically in cities that are along a legal routing. It is legal to route SFO-ATL through MSP. Because Jacqueline found low level availability on delta.com for her entire itinerary (she has magical powers), her total cost is 25,000 SkyMiles.
    • Jeff’s LAX-Australia roundtrip in Qantas first costs 145,000 AAdvantage miles. He craftily added the transcons in fully flat seats for no additional miles. Total: 145,000 miles.
  4. Miles Foregone by Not Purchasing Ticket- Use the Great Circle Mapper to calculate how many miles the trip would earn in coach if you paid the fare. Add in any mileage earning bonus you would receive if you have status on the airlines you are flying. Use the miles earned in coach even if your award is booked in first classunless you would have paid for a first class seat in cash if you had not used miles.
    • Bill’s PIT-LAX is 2136 miles, so he is forgoing 2136 miles by not purchasing his ticket with cash.
    • Jacqueline’s routing is 4634 miles, but she is a Delta Diamond Medallion flier, so she would earn a 125% mileage bonus on her miles flown if she purchased the ticket with cash, so she is foregoing 10,426 (4634 + 1.25*4634) miles by not purchasing the ticket with cash.
    • Jeff’s megatrip is 20,226 miles of flying, which is how many he’s foregoing by not purchasing the ticket with cash.

 

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I use the calculator daily, and I hope you will use it regularly now also.

This is a blog about frequent flier miles. Almost everything I write is designed to help you accumulate miles and points efficiently then redeem them for free travel–up front if possible.

But sometimes using points for a ticket is a huge mistake. Sometimes, just book with cash. JBWC. I’ll give two examples, and I’ll tell you how to figure out whether you should book with cash or miles on a particular trip.

LAX to Honolulu

The first example comes from yesterday. A friend and I were discussing how he’d never been to Hawaii, which I think should be a crime. (Not a felony, but definitely a misdemeanor.)

I asked, “How would you like to go in December?” He was excited, so I pulled up AA.com to search for award space.

We’d be flying LAX to Honolulu roundtrip, so I knew if I could find space on a flight operated by American Airlines, I could book us each for 25k Avios and $22 roundtrip on BA.com.

I started the search on AA.com even though I planned to use Avios because AA’s calendar function makes it much easier to see the possible dates of travel.

Any day with space at the 17.5k level or 22.5k level will be available for 12.5k Avios as long as the space is on a flight operated by American Airlines or Alaska (and not Hawaiian.)

After finding the latest dates we could travel in December–most dates around Christmas don’t have sAAver space–I went straight to ba.com to book the exact flights I had found on aa.com. (Here’s a post on using the ba.com search.)

Within two minutes of getting on ba.com–and withing ten minutes of bringing up flying to Hawaii–I was at the payment page.

Things looked good superficially because 25k Avios and $22 per person is the cheapest way to book an award to Hawaii. (See this post on the cheapest ways to get to Hawaii.)

Plus I discovered last time I used Avios to Hawaii that booking an AA flight with Avios grants Priority AAccess, so we could breeze through security and board earlier.

Then the following conversation occurred completely in my head since selling or bartering points is against program rules.

“How much would you charge me for the ticket?”

“Well, I value Avios at 1.7 cents. That means including taxes, each ticket ‘costs’ $447.”

“Is that a good deal?”

As it turns out, that’s not a good deal. I went to kayak.com, searched the same dates, and I came up with two paid tickets for $362.40 each.

Plus the paid flights had better departure times to get us another 16 hours in Hawaii. And we’ll earn Hawaiian Miles.

While Avios from LAX to Hawaii is often a great deal, it’s always important to check the deal against paid flights. Let me give another example.

Mama Miler from Hanoi to Singapore

A few weeks ago, I was booking an award for the Frequent Miler’s mom. The main award had been booked using a stopover and open jaw.

Detroit to Bangkok, Singapore to Hong Kong, Hong Kong to Detroit.

But there was one segment we couldn’t fit on the first award from Hanoi to Singapore. I sent her this email about that segment.

Options for Hanoi to Singapore

Singapore Airlines has a direct flight:

3/2
HAN-SIN 1:00 PM – 5:30 PM
3:30

Business is 17,500 UNITED miles and $16 per person. Economy is 12,500 UNITED miles and $16 per person. Economy should not be considered as you’ll see below.

The route is operated by a 2-class 777-200 (http://www.seatguru.com/airlines/Singapore_Air/Singapore_Air_Boeing_777-200_2.php). You would be on angled lie flat seats in business class.

I also checked cash options, and you can fly direct on Tiger Airways for $80 each. That flight time is 11:00 AM – 3:25 PM. I have never flown Tiger. I know they’re a low-cost carrier based in Singapore.

$80 is an incredible deal. Since I value Ultimate Rewards at 2 cents, the award on Singapore would be worth $266 per person in economy and $366 in business.

I see the only two decent options being Tiger Airways for $80 or Singapore business for 17,500 miles and $16.

One other factor is Tiger’s bag fees, which can be found here and would start at $20 per person. (Chart in Singapore dollars not US dollars: http://www.tigerairways.com/sg/en/fees2.php)

So in this example, the economy class award made no sense since an economy flight on another airline could be had for 1/3 of the value of the miles that would have to be shelled out for an economy award.

This doesn’t say anything about whether buying the economy ticket or booking the business award is better. That answer has to do with how much she values a business class flight versus economy. But if she wanted an economy flight, my advice would be simple. JBWC. Just book with cash.

How you can apply this

This is where my Mile Value Calculator comes into play. You can use the calculator to figure out whether to book an award or book with cash.

Step 1 – Value Your Miles

Have a value for each type of mile. I’ve valued United, Delta, US Airways, American, and Avios. You can see the links to that analysis here. For instance, I value Avios at 1.7 cents.

You should value the miles yourself. The basic process is to figure out how much value you get from awards with those miles. (The real process is more complicated.) You can figure out the value you’ve gotten on past awards by using the Mile Value Calculator.

Step 2 - Figure Out the Value You’d Get from a Prospective Award

All you need to do is plug in the ticket value, the taxes and fees, the miles used, and the miles foregone.

The ticket value is the lesser of the cost of an equivalent cash ticket and your personal valuation. For argument’s sake, let’s say I value the LAX-HNL roundtrip award at $500. The cash ticket only costs $362. So I would put in $362, which is the lesser of the two figures.

This is crucial, so you avoid absurdities like saying you get 20 cents per mile on international first class awards that cost $10,000. And it also avoids inflating the value of miles by using a personal valuation for a ticket when a cash equivalent is cheaper.

The miles foregone can be found at gcmap.com by typing in your routing. Adjust for any elite status you have. I don’t have elite status on American or Hawaiian, so in my LAX-HNL example, I would forgo 5,112 miles by using an award instead of buying a ticket and earning butt-in-seat miles.

Step 3 – Compare the Two Figures from Steps 1 and 2

This is the easy part. If the cents per mile you’d earn on a prospective award is less than your value for that type of mile from Step 1, JBWC. Just book with cash.

Let’s take a look at my LAX to Honolulu roundtrip flight decision. I valued Avios at 1.7 cents each in Step 1. In Step 2, I plugged the prospective award into the Mile Value Calculator.

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Specifically I plugged in 362 to the first field. That’s the value since that’s the price of a cash equivalent, which is less than my subjective value.

The award had $22 in taxes, so I plugged 22 into the second field.

The award cost 25k Avios, so I put 25000 into field three.

Booking an award instead of buying with cash would mean foregoing 5,112 butt-in-seat miles, so 5112 is the last datum.

Plug those in, and the award from LAX-HNL roundtrip would only be getting me 1.13 cents per Avios.

I value Avios at more than 1.13 cents–1.7 cents–so this award is not worth giving up those miles. JBWC!

Recap

We all love miles for the money they save, and the experiences they unlock. But if you’re not getting maximum value, you’re not saving as much money or having as many experiences as you could.

Sometimes this means you should save your miles, and just book with cash. I gave two examples of times to book with cash in this post–including booking with cash instead of booking the normally fantastic 25k Avios to Hawaii award.

The Mile Value Calculator is the tool needed to determine whether to book with miles or cash on a case by case basis.

 

 

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This post is part of a four-part series. In Part 1, we looked at the mechanics of the Delta Airlines program. In Part 2, we looked at its award chart and rules to find valuable awards. In Part 3, we’ll value specific SkyMiles awards. In Part 4, I’ll put a number on one SkyMile.

Now that we’ve looked at the rules of the SkyMiles program, and we’ve looked at the chart to find some valuable awards, we’re going to value specific awards. As always, to value awards, we need four things:

    • the lesser of the price of paying cash and your subjective value of the award
    • taxes and fees paid
    • miles needed to book
    • miles foregone by not buying a cash ticket

 

Because the very first datum we need is the lesser of the price the award would cost to buy with cash and its subjective value to you, there is a subjective component to valuing awards. So these are my values for these awards. Follow along with the steps in this post to value your own awards to find your own value for SkyMiles.

1. Make a list of awards you’ve booked, awards you plan to book, and dream awards. Include all classes you would consider flying. My list is below. Business class is B, and Economy class is E. I’ve put a B even when the award includes domestic first class on a two-cabin plane because those awards still price in business class. Stopovers are represented by a double slash. (//)

LAX-JFK-LHR, MAD-CDG//CDG-LAX (E) LAX to London, open jaw returning from Madrid to Paris (stopover), Paris to LAX

LAX-CDG//CDG-LOS, LOS-CDG-LAX (B) LAX to Paris (stopover), Paris to Lagos, returning Lagos to LAX

LAX-ATL//ATL-MSY, MSY-LAX (E) LAX to Atlanta (stopover), Atlanta to New Orleans, returning New Orleans to LAX

It’s a short list, partially because for most awards, I need to call Delta to price them, which is a real hassle. But these three awards are the three types I highlighted on the Delta chart as good values, so I don’t think we can do too much better.

2. Price the awards on delta.com or by calling 800-323-2323. For awards with a stopover, search each segment on delta.com to find low level availability, then choose the multicity search option and select the low level itinerary you pieced together. The final screen should price it correctly, but since it’s delta.com, no guarantees.

For awards that can’t be searched on delta.com, call Delta and have them piece together a low level award with a quote for the miles price and total taxes and fees. For my awards, the prices are:

LAX-JFK-LHR, MAD-CDG//CDG-LAX (E) 60k SkyMiles and $105.60

LAX-CDG//CDG-LOS, LOS-CDG-LAX (B) 120k SkyMiles and $275.20

LAX-ATL//ATL-MSY, MSY-LAX (E) 25k SkyMiles and $7.50

3. Price all the itineraries on kayak.com. Search the same dates. Find the cheapest flight with a comparable routing regardless of airline. If the award itinerary includes a stopover as most of my international itineraries do, search as two different itineraries on kayak.com. Write down the prices of the itineraries and also your subjective value of the itineraries. As usual, we’ll be using the lesser of the price and my subjective value. (What am I talking about? “Subjective value”? See this post.) Below is the lesser of the price and subjective value for my itineraries. In all cases, my subjective value was lower than the price, which will always be the case when I’m flying internationally in a premium cabin.

This is how I construct my subjective values. I start with my value of a coach trip from my origin to my destination.

Then, if applicable, I add in how much extra I would pay for flying in the premium cabin that my award is in, of course factoring in the specific airline and seats that my routing will use.

Then if applicable, I add in the value of the en route stopover. If the stopover is in the US, I decide how much I would value a trip from LA to that city. I add the value of a separate roundtrip to the US-stopover city to the sum from above. Why? The stopover is saving me a separate entire roundtrip to the stopover city.

If the stopover is abroad, I add in how much extra it would cost me to get from my destination to the stopover city. In Europe this is usually a pretty small amount because of its budget carriers.

LAX-JFK-LHR, MAD-CDG//CDG-LAX (E) $1,100

LAX-CDG//CDG-LOS, LOS-CDG-LAX (B) $2,200

LAX-ATL//ATL-MSY, MSY-LAX (E) $450

4. Figure out how many miles you’re foregoing on gcmap.com. Use the Great Circle Mapper to figure out the distance of your routing. Add in any multiplier for the status you have on the Delta. This tells you how many miles you’re foregoing by using an award instead of cash for the ticket, and that’s a key component in figuring out the value of the award. I’ll skip listing this for my flights.

5. Plug the four values in the milevalue.com calculator! If you don’t quite understand how to use it, read this post.

6. Order your awards from greatest cents per mile to fewest. For me, the list looks like this:

  1. LAX-ATL//ATL-MSY, MSY-LAX (E)                 1.52 cpm
  2. LAX-CDG//CDG-LOS, LOS-CDG-LAX (B)        1.40 cpm
  3. LAX-JFK-LHR, MAD-CDG//CDG-LAX (E)      1.38 cpm

 

Wow! These value are way lower than United, US Air, American, British Airways, and Southwest. But these numbers represent a narrow claim: the types of awards I’m most likely to take value Delta miles at 1.4-1.5 cents each. I am absolutely positive that many people can find the perfect Delta awards for them that are worth more than 2 cpm. But for me, those awards don’t really exist.

7. Put a single number on the value of a SkyMile. To do this, we’ll have to use our list of award values from above and make adjustments based on the other characteristics of the SkyMiles program we talked about in Part 1. We’ll do that in Part 4, the final installment of the series.

Hey there, you’re reading an outdated post! The updated series from March 2013 can be found here.

This is the twenty-ninth post in a monthlong series. Each post will take about two minutes to read and may include an action item that takes the reader another two minutes to complete. I am writing this for an audience of people who know nothing about frequent flier miles, and my goal is that by the end, you know enough to fly for free anywhere you want to go.

The Mile Value Calculator is one of this site’s most important contributions to the world of frequent flier miles. Before making any redemption, you should check its value with the calculator. Before deciding whether to purchase with cash or miles, you should check which is a better deal with the calculator. While putting your own value on AAdvantage miles or Avios, you should use the calculator.

Now that you’re nearing the end of your crash course on miles, it’s important to know how to use it properly. The following is an excerpt from the very first blog post I published. It explains what to plug into the four text boxes in the calculator with three examples:

Frequent Flier Miles Value Calculation

  1. Ticket Value- For the ticket we are acquiring with miles, we need the lesser of the ticket’s value to us and the ticket’s cost.
    • Example: A coach one-way ticket from LAX-PIT costs $200. Bill is flying to Pittsburgh to propose to his girlfriend, so he values the ticket at $5000. For the formula, we use the lesser of the cost ($200) and the value ($5000), so we plug in $200.
    • Example: Jacqueline lives in San Francisco and decides at the last second to go to Atlanta to watch UVA basketball play in the ACC Tournament. On the way, she wants to stop in Minneapolis to visit family. Last second tickets from SFO-MSP-ATL-SFO cost $1213. Jacqueline is not a rabid fan and sees her family several times a year, so she only values the chance to go take this trip at $450. For the formula, we use the lesser of the cost ($1213) and the value ($450), so we plug in $450.
    • Example of Premium International Travel: The most common time the cost and value diverge are for international first class travel. Jeff lives in Los Angeles and wants to book his dream vacation to see the Australian Open with a little exploration of Australia thrown in. He is also an expert on maximizing AAdvantage miles, so he knows he can get a free stopover in the international gateway city for as long as he likes. So he books JFK-LAX (June), LAX-SYD (January), MEL-LAX (January), and LAX-MIA (March). The transpacifics are in Qantas first class on A380s; the transcontinentals are on AA first class on 777s with fully flat seats. He plans on using the transcontinentals as half his airfare for upcoming vacations to New York and Miami. In cash, this itinerary would cost $25,700. To figure out his subjective value, Jeff looks at the cost of this itinerary in coach, which is what he would book if he had to use cash. The cheapest Australia itinerary in coach costs $1225, but it includes stops and is over 40 hours one way. Jeff values his direct flights $400 more than that and his first class a further $600 more. So he values the Australia part at $2225. He values the other first class legs, using the same process of finding the applicable coach fare and then adjusting for his valuation of first class and routing, at $700 total. So for the formula, we use the lesser of the cost $25,700 and his value ($2925 = $2225 + $700), so we plug in $2925.
  2. Taxes and Fees Associated with an Award Booking- Include all taxes, award booking fees (US Airways), phone ticketing fees, close in ticketing fees, and any other fees. This number should be easy to find, since it is the total amount the airline is trying to charge your credit card.
    • Bill purchased his flight within 21 days of departure online. United hits him with a $75 close in ticketing fee and $2.50 in taxes, so his total taxes and fees associated with the award booking are $77.50
    • Jacqueline purchases online and Delta does not charge close in ticketing fees. Her total taxes and fees are $7.50.
    • Jeff has to call a phone rep to book Qantas flights with AA miles. AA charges him a $25 phone fee plus taxes of $128. His total taxes and fees are $153.
  3. Miles Used- How many miles will the trip we are considering cost?
    • Bill found saver award space for the date he wanted. His trip cost 12,500 United miles.
    • Delta allows free stopovers domestically in cities that are along a legal routing. It is legal to route SFO-ATL through MSP. Because Jacqueline found low level availability on delta.com for her entire itinerary (she has magical powers), her total cost is 25,000 SkyMiles.
    • Jeff’s LAX-Australia roundtrip in Qantas first costs 145,000 AAdvantage miles. He craftily added the transcons in fully flat seats for no additional miles. Total: 145,000 miles.
  4. Miles Foregone by Not Purchasing Ticket- Use the Great Circle Mapper to calculate how many miles the trip would earn in coach if you paid the fare. Add in any mileage earning bonus you would receive if you have status on the airlines you are flying. Use the miles earned in coach even if your award is booked in first class unless you would have paid for a first class seat in cash if you had not used miles.
    • Bill’s PIT-LAX is 2136 miles, so he is forgoing 2136 miles by not purchasing his ticket with cash.
    • Jacqueline’s routing is 4634 miles, but she is a Delta Diamond Medallion flier, so she would earn a 125% mileage bonus on her miles flown if she purchased the ticket with cash, so she is foregoing 10,426 (4634 + 1.25*4634) miles by not purchasing the ticket with cash.
    • Jeff’s megatrip is 20,226 miles of flying, which is how many he’s foregoing by not purchasing the ticket with cash.

[wpcalculator idcalc=”1″]

I use the calculator daily, and I hope you will use it regularly now also.

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This post is part of a four-part series. In Part 1, we looked at the mechanics of the United Mileage Plus program. In Part 2, we looked at the chart and rules to find valuable awards. In Part 3, we’ll value specific Mileage Plus awards. In Part 4, I’ll put a number on one Mileage Plus mile.

Now that we’ve looked at the rules of the Mileage Plus program, and we’ve looked at the chart to find some valuable awards, we’re going to value specific awards. As always, to value awards, we need four things:

  • the lesser of price or value of the award
  • taxes and fees paid
  • miles needed to book
  • miles foregone by not buying a cash ticket

 

Because the very first datum we need is the lesser of the price the award would cost and its subjective value to you, there is a subjective component to valuing awards. So these are my values for these awards. Follow along with the steps in this post to value your own awards to find your own value for Mileage Plus miles.

1. Make a list of awards you’ve booked, awards you plan to book, and dream awards. Include all classes you would consider flying. My list is below. First class is F, Business class is B, and Economy class is E. I’ve put a B even when the award includes domestic first class on a two-cabin plane because those awards still price in business class. Stopovers are represented by a double slash. (//)

HRK-VIE-AMS-IAH-LAX (E) Kharkiv, Ukraine to Los Angeles

PIT-LAX (E) Pittsburgh to LA

LAX-SYD-AKL (F) LA to Auckland, New Zealand

LAX-FRA//FRA-ARN, CPH-FRA-LAX (B) LA to Frankfurt (stopover) to Stockholm, returning Copenhagen to LA

LAX-HNL//HNL-GUM, GUM-NRT-LAX (E) LA to Honolulu (stopover) to Guam, returning to LA

LAX-IAH//IAH-LOS, LOS-IAH-LAX (B) LA to Houston (stopover) to Lagos, Nigeria, returning to LA

2. Price the awards on united.com. Sign into your Mileage Plus account, use the award search, and find the awards you’ve written down. Note how many miles and dollars in taxes and fees you would be charged to book that award. For my awards, the prices are:

HRK-VIE-AMS-IAH-LAX (E) 30,000 miles and $87

PIT-LAX (E) 12,500 miles and $2.5

LAX-SYD-AKL (F) 80,000 miles and $14

LAX-FRA//FRA-ARN, CPH-FRA-LAX (B) 100,000 miles and $129

LAX-HNL//HNL-GUM, GUM-HNL-LAX (E) 70,000 miles and $44

LAX-IAH//IAH-LOS, LOS-IAH-LAX (B) 120,000 miles and $95

I sure love those low United taxes and fees!

3. Price all the itineraries on kayak.com. Search the same dates. Find the cheapest flight with a comparable routing regardless of airline. If the award itinerary includes a stopover as most of my international itineraries do, search as two different itineraries on kayak.com. Write down the prices of the itineraries and also your subjective value of the itineraries. As usual, we’ll be using the lesser of the price and your subjective value. (What am I talking about? “Subjective value”? See this post.) Below is the lesser of the price and subjective value for my itineraries. In all cases, except Kharkiv to LAX in coach, my subjective value was lower than the price, which will always be the case when I’m flying internationally in a premium cabin.

This is how I construct my subjective values. I start with my value of a coach trip from my origin to my destination.

Then, if applicable, I add in how much extra I would pay for flying in the premium cabin that my award is in, of course factoring in the specific airline and seats that my routing will use.

Then if applicable, I add in the value of the en route stopover. If the stopover is in the US, I decide how much I would value a trip from LA to that city. I add the value of a separate roundtrip to the US-stopover city to the sum from above. Why? The stopover is saving me a separate entire roundtrip to the stopover city.

If the stopover is abroad, I only add in how much extra it would cost me to get from my destination to the stopover city. In Europe this is usually a pretty small amount because of their budget carriers.

HRK-VIE-AMS-IAH-LAX (E) $784

PIT-LAX (E) $225

LAX-SYD-AKL (F) $1460

LAX-FRA//FRA-ARN, CPH-FRA-LAX (B) $2300

LAX-HNL//HNL-GUM, GUM-NRT-LAX (E) $1500

LAX-IAH//IAH-LOS, LOS-IAH-LAX (B) $2300

4. Figure out how many miles you’re foregoing on gcmap.com. Use the Great Circle Mapper to figure out the distance of your routing. Add in any multiplier for the status you have on the United Airlines. This tells you how many miles you’re foregoing by using an award instead of cash for the ticket, and that’s a key component in figuring out the value of the award. I’ll skip listing this for my flights.

5. Plug the four values in the milevalue.com calculator! If you don’t quite understand how to use it, read this post.

[wpcalculator idcalc=”1″]

6. Order your awards from greatest cents per mile to fewest. For me, the list looks like this:

  1. LAX-FRA//FRA-ARN, CPH-FRA-LAX (B) 1.93 cpm
  2. HRK-VIE-AMS-IAH-LAX (E) 1.84 cpm
  3. LAX-HNL//HNL-GUM, GUM-NRT-LAX (E) 1.76 cpm
  4. LAX-SYD-AKL (F) 1.63 cpm
  5. LAX-IAH//IAH-LOS, LOS-IAH-LAX (B) 1.62 cpm
  6. PIT-LAX (E) 1.52 cpm

 

7. Put a single number on the value of a Mileage Plus mile. To do this, we’ll have to use our list of award values from above and make adjustments based on the other characteristics of the Mileage Plus program we talked about in Part 1. We’ll do that in Part 4, the final installment of the series.

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This post is part of a four-part series. In Part 1, we looked at the mechanics of the AAdvantage program. In Part 2, we looked at the mechanics of a stopover, including how to use them to get free oneway trips within North America. In Part 3, we’ll value specific AAdvantage awards. In Part 4, I’ll put a number on one AAdvantage mile.

Now that we understand the AAdvantage program, and in particular its stopover rules, it’s time to value a few specific AAdvantage awards. This will give us a baseline value for an AAdvantage mile that we’ll adjust in Part 4. I’ll break down valuing specific AAdvantage awards step-by-step so you can do the same thing for your dream award.

1. Make a list of awards you’ve made and dream awards, listing all classes of service you would consider flying. My list is below. First class is F, Business class is B, and Economy class is E. I’ve put a B even when the award includes domestic first class on a two-cabin plane because those awards still price in business class. Stopovers are represented by a double slash. (//)

LAX-DFW-TPA//TPA-LGW, LHR-ORY (B)

MEL-LAX//LAX-DFW-TPA (B)

LAX-MIA-MVD (E & B)

TPA-MIA-LAX//LAX-HKG-BKK (E & F)

HNL-LAX//LAX-LIM (B)

LAX-DFW-CUN//CUN-LGW (B)

LAX-CHO (r/t) (E)

2. Price the awards that fly only on American Airlines and Alaska Airlines on aa.com. Sign into your AAdvantage account, use the award search, and find the awards you’ve written down. Note how many miles and dollars in taxes and fees you would be charged to book that award. For me only two of my potential awards are flown completely on American. The LAX-CHO roundtrip in Economy class priced out to 25,000 miles and $10 roundtrip. The LAX-MVD priced out to 30,000 miles and $5 in Economy and 50,000 miles and $5 in Business.

3. Price the other awards by calling AA at 800-882-8880. Of course, this is also how you would go about buying the awards that aren’t flown completely by American or Alaska, and buying in this way incurs a $25 phone ticketing fee. For me the prices were:

LAX-DFW-TPA//TPA-LGW, LHR-ORY (B) 50,000 miles and $332

MEL-LAX//LAX-DFW-TPA (B) 62,500 miles and $113

TPA-MIA-LAX//LAX-HKG-BKK (E & F) 35,000 miles and $32.50 in Economy, 67,500 miles and $32.50 in First

HNL-LAX//LAX-LIM (B) 30,000 miles and $45

LAX-DFW-CUN//CUN-LGW (B) 50,000 miles and $407

4. Price all the itineraries on kayak.com. Search the same dates. Find the cheapest flight with a comparable routing regardless of airline. If the award itinerary includes a stopover as all of my international itineraries do, search as two different itineraries on kayak.com. Write down the prices of the itineraries and also your subjective value of the itineraries. As usual, we’ll be using the lesser of the price and your subjective value. (What am I talking about? “Subjective value”? See this post.) Below is the lesser of the price and subjective value for my itineraries. In all cases, my subjective value was lower than the price, which will essentially always be the case when I’m flying internationally in a premium cabin.

LAX-DFW-TPA//TPA-LGW, LHR-ORY (B) $1,200

MEL-LAX//LAX-DFW-TPA (B) $1,300

LAX-MIA-MVD (E & B) $700 in Economy, $950 in Business

TPA-MIA-LAX//LAX-HKG-BKK (E & F) $850 in Economy, $1,375 in First

HNL-LAX//LAX-LIM (B) $900

LAX-DFW-CUN//CUN-LGW (B) $1,200

LAX-CHO (r/t) (E) $350

5. Figure out how many miles you’re foregoing on gcmap.com. Use the Great Circle Mapper to figure out the distance of your routing. Add in any multiplier for the status you have on the American Airlines. This tells you how many miles you’re foregoing by using an award instead of cash for the ticket, and that’s a key component in figuring out the value of the award. I’ll skip listing this for my flights.

6. Plug the four values in the milevalue.com calculator! If you don’t quite understand how to use it, read this post.

[wpcalculator idcalc=”1″]

7. Order your awards from greatest cents per mile to fewest. For me, the list looks like this:

  1. HNL-LAX//LAX-LIM (B)                                      2.33 cpm
  2. LAX-MIA-MVD (E)                                                 1.89 cpm
  3. TPA-MIA-LAX//LAX-HKG-BKK (E)                   1.78 cpm
  4. TPA-MIA-LAX//LAX-HKG-BKK (F)                   1.71 cpm
  5. LAX-MIA-MVD (B)                                                 1.66 cpm
  6. MEL-LAX//LAX-DFW-TPA (B)                           1.64 cpm
  7. LAX-DFW-TPA//TPA-LGW, LHR-ORY (B)      1.53 cpm
  8. LAX-DFW-CUN//CUN-LGW (B)                        1.39 cpm
  9. LAX-CHO (r/t) (E)                                                 1.15 cpm

8. Put a single number on the value of an AAdvantage mile. To do this, we’ll have to use our list of award values from above and make adjustments based on the other characteristics of the AAdvantage program we talked about in Part 1. We’ll do that in Part 4, the final installment of the series.

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25 871

Update April 1, 2014: This post was written before Southwest’s massive devaluation. Now you need 70 points per dollar for Wanna Get Away? fares instead of 60. Now Rapid Rewards are worth about 1.45 cents each.

Southwest Airlines Rapid Rewards points are worth 1.69 cents per point. Unlike my calculation of the value of an Avios, the valuation of a Rapid Rewards point does not change based on where you live or your flying preferences because Rapid Rewards is a fixed-value award program. That means the number of points needed for an award is directly dictated by the price of the fare, and the number of points earned for flying a paid fare is directly dictated by the price of the fare also. The distance of flights and the regions in which the origin and arrival city are located are irrelevant to calculating Rapid Rewards points needed or earned.

Let’s go through the rules and parameters of the Rapid Rewards program, consider the strategy for maximizing the value of your Rapid Rewards points, and calculate the value of one Rapid Rewards point.

Important rules:

  1. Every award in the Wanna Get Away fare class costs 60 points per dollar of the base fare including excise tax. Other fare classes are available for awards for more points per dollar, but since Southwest’s flights are all operated with all-coach planes, there is no reason to book any awards except Wanna Get Away fares.
  2. All Southwest flights have open seating. Your boarding pass tells you the order in which to board, but not your seat. You can board earlier if you pay $10 extra when purchasing your ticket or if you purchase a more expensive fare class. Or you can check in online 24 hours before the flight and get priority over those who check in later.
  3. The only fee on Southwest award tickets is $2.50 per segment for the 9/11 security fee. There are no ticketing fees, no change fees, and no redeposit fees if you decide to change or cancel your ticket. Pleasantly, the Passenger Facility Charge and Segment Fee that are added to the base fare when purchasing with cash are not charged when booking an award ticket. (Nor are they included in the fare on which the 60 points per dollar award price is calculated.)
  4. Award availability is the exact same as cash availability. If a flight can be booked with cash, it can be booked with points. The only note is that Wanna Get Away availability disappears several days before departure.

Strategy to Maximize the Value of Southwest Rapid Rewards Points:

  1. If you cancel an award, the points are redeposited immediately, and any charges to your credit card for 9/11 security fees are reversed. Therefore if you know you want to book an award with Southwest, book it right now. If the price rises, you locked in the best fare and maximized the value of your points. If the price falls, you can cancel your original reservation and rebook at the lower price. If you don’t want to constantly be checking fares, then at least monitor Southwest’s amazing sales, which seem to pop up every few months and are announced by email, which you can signup for here.
  2. Book an award on Southwest when you’re flying with lots of bags. Southwest is the only airline that still lets you check two bags free each way. That will save you $120 roundtrip versus most legacy carriers.
  3. Book a direct route that only Southwest serves. Eschewing the hub-and-spoke model of most carriers, Southwest has a ton of direct point-to-point flights that have no competition. If you value your time, flying direct on Southwest is much more valuable than flying a route with a connection on another airline.

Examples of Southwest Awards:

1) LAX-PIT oneway connecting in LAS

  • Lesser of Price and Value: $221.60
  • Award Taxes and Fees: $5
  • Rapid Rewards Points Needed to Book: 12,000
  • Rapid Rewards Points Foregone by Not Purchasing with Cash: 1,200

2) LAX-PHX oneway direct

  • Lesser of Price and Value: $69.80
  • Award Taxes and Fees: $2.50
  • Rapid Rewards Points Needed to Book: 3,540
  • Rapid Rewards Points Foregone by Not Purchasing with Cash: 354

I think these are both pretty good cash fares, so I used price for “Lesser of Price and Value” in both cases. Plugging these values into the milevalue.com Mile Value Calculator nets values of 1.64 cents per Rapid Rewards point to Pittsburgh and 1.73 cents per point to Phoenix. For other awards, I got values between 1.57 and 1.75 cents per point. Why does this fixed-value program not have a fixed value per point? It’s that quirk I mentioned above of not charging award passengers the Passenger Facility Charge and Segment Fee and also not charging award passengers points equal to the dollar amount of those fees. What it means is that you’ll get a slightly higher cents per point booking cheaper flights.  I’ll take the middle end of the range and value Rapid Rewards points at 1.66 cents per point for now. The final step in the valuation is to compare Southwest awards to flights purchased with cash in order to come to a final valuation.

Southwest Awards Compared to Buying with Cash:

Buying an award with Rapid Rewards points on Southwest is exactly the same as buying a flight with cash except for two things. The first is that awards don’t have the Passenger Facility Charge or Segment Fee. I mentioned that above, and that’s already been factored into the valuation, so I’ll ignore it here, so we don’t double count it. The second difference is that if you pay with cash then cancel, you don’t get cash back. You get Southwest credit for a future flight. Obviously cash is slightly more valuable. If you cancel an award redemption, you get back the exact points you put in, so you’re in exactly the same position as before the redemption. Advantage award redemption. The difference is slight, but I will increase my valuation from 1.66 to 1.69 cents per Rapid Rewards point because of it.

Southwest Airlines has a very different frequent flier program than the legacy carriers, so exploiting it requires a different approach. As we’ve seen the key is to find good deals in cash and book those flights with points. Southwest’s policy of allowing award redeposits free of charge makes that easier, so everyone should be able to wring 1.69 cents out of every Rapid Rewards point.

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In Part 1, we looked at the mechanics of the Avios program and how it compared to the AAdvantage program (another oneworld program.) In Part 2, we built on the rules of the Avios program to discover what awards they imply are the best values. In Part 3, we’ll value specific Avios awards. In Part 4, I’ll put a number on an Avios. And in post later this week, I’ll list every possible redemption from NYC and LA with Avios.

Now that we understand the Avios program and have thought about the types of awards that will net the highest value, let’s find those awards. I’m an LAX-based flier, so I’ll be doing this analysis for me from Los Angeles. You should do this analysis for you from your airport. I’ve broken the process down step-by-step.

1) Use my secret travel resource to list all your dream direct flights– Wikipedia. Seriously, the best way to find all the routes from your airport is wikipedia.org’s entry for your home airport under the “airlines and destinations” section. Make a list of any routes that you might want to fly that are flown by these airlines: American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN, Qantas, Royal Jordanian, S7, Aer Lingus, Alaska Airlines, and airberlin. These are all the oneworld partners and non-oneworld partners of BA on which you can redeem Avios.

For me, this netted a list of LAX to HNL, KOA, LIH, OGG, IAH, AUS, MEX, MEL, SYD, HKG, MAD, and LIM. From Post 2 in this series, I think we can pretty safely say that MEL, SYD, HKG, and MAD will be bad redemption values. The huge fuel surcharges levied on US to Australia, Europe, and Asia flights in the Avios program will kill the value. But I will include them in this post just to show how bad the redemptions are.

2) Add in your dream destinations on which there are no direct flights. For me there aren’t many since LAX has so many direct flights, but if you live in Charlottesville, VA, this list will dwarf the former. For each destination, figure out the most direct routing. You can do that on wikipedia, kayak.com, or BA.com’s award search engine.

3) Add in other flights you might want to take from other airports. I like to hit multiple countries on one trip. Often the short hops on those trips are very expensive. If they’re served by a oneworld carrier, Avios can be a great redemption. For me, here are some non-LAX awards I have booked or considered booking:

  • LIM-SCL
  • LIM-EZE
  • AEP-MDZ
  • AEP-IGR
  • SYD-CNS-MEL
  • TPA-MIA
  • LGA-ATL
  • CHO-ORD

4) Price them on BA.com. Sign in to your Executive Club account, and choose Spending Avios then Book Flights with Avios. Plug in the dates of a desired award or some dummy dates if you don’t know when you want to go. Note the price in Avios and taxes and fees in dollars. For me, the info is below. All prices are roundtrip unless otherwise noted:

  • HNL (oneway) 12,500 Avios and $2.50
  • KOA, LIH, and OGG 25,000 Avios and $5
  • IAH 20,000 Avios and $5
  • AUS 20,000 Avios and $5
  • MEX 20,000 Avios and $144 (includes $25 phone fee to call BA to book Alaska Airlines award)
  • MEL and SYD 100,000 Avios and $785
  • HKG 70,000 Avios and $340
  • MAD 50,000 Avios and $617
  • LIM 50,000 Avios and $104

And the non-LAX originating flights:

  • LIM-SCL (oneway) 10,000 Avios and $31
  • LIM-CUZ (oneway) 4,500 Avios and $9
  • AEP-MDZ (oneway) 4,500 Avios and $31
  • AEP-IGR (oneway) 7,500 Avios and $37
  • SYD-CNS-MEL 20,000 Avios and $56
  • TPA-MIA 9,000 Avios and $5
  • LGA-ATL 15,000 Avios and $5
  • CHO-ORD 9,000 Avios and $5

5) Price them on kayak.com. Search the same dates and direct flights. If the price is below your subjective value for the trip, write down the price. If the price is more than your subjective value for the trip, write down your subjective value for the trip. (What am I talking about? “Subjective value”? See this post.) Below is the lesser of my value and the price on kayak.com:

  • HNL (oneway) $250
  • KOA, LIH, and OGG $500
  • IAH $300
  • AUS $300
  • MEX $352
  • MEL $1160
  • SYD $1240
  • HKG $1402
  • MAD $1000
  • LIM $750

And the non-LAX originating flights:

  • LIM-SCL (oneway) $250
  • LIM-CUZ (oneway) $120
  • AEP-MDZ (oneway) $150
  • AEP-IGR (oneway) $176
  • SYD-CNS-MEL $482
  • TPA-MIA $138
  • LGA-ATL $300
  • CHO-ORD $297

6) Figure out how many miles you’re foregoing on gcmap.com. Use the Great Circle Mapper to figure out the distance of your routing. Add in any multiplier for the status you have on the British Airways. This tells you how many miles you’re foregoing by using an award instead of cash for the ticket, and that’s a key component in figuring out the value of the award. I’ll skip listing this for my flights.

7) Plug the four values in the milevalue.com calculator! If you don’t quite understand how to use it, read this post.

[wpcalculator idcalc=”1″]

eight) Order your awards from greatest cents per mile to fewest. For me, the list looks like this:

  1. AEP-MDZ 2.32
  2. LIM-CUZ 2.28
  3. CHO-ORD 1.92
  4. LIM-SCL 1.90
  5. SYD-CNS-MEL 1.88
  6. LGA-ATL 1.79
  7. AEP-IGR 1.71
  8. LAX-KOA 1.65
  9. LAX-OGG 1.65
  10. LAX-HNL 1.64
  11. LAX-LIH 1.64
  12. TPA-MIA 1.40
  13. LAX-AUS 1.31
  14. LAX-IAH 1.30
  15. LAX-HKG 1.26
  16. LAX-LIM 1.11
  17. LAX-MEX 0.90
  18. LAX-MAD 0.62
  19. LAX-SYD 0.40
  20. LAX-MEL 0.32

9) Put a single number on the value of Avios. To do this, we’ll have to use our list of award values from above and make adjustments based on the other characteristics of the Avios program we talked about in Part 1. We’ll do that in Part 4, the final installment of the series.

Continue to Part 4.

 

 

8 160

Figuring out the value of your frequent flier miles is crucial for determining whether an award is a good deal, whether you should book a specific trip with cash or miles, which credit card bonus to sign up for, and which airlines to book an award on if you have several options. Perhaps because it can seem daunting to precisely calculate the value of a mile, I have seen no systematic attempts to do so mathematically. Luckily the formula is actually quite simple, and I’ve created an even simpler calculator at the bottom of this post. The way to calculate the value of a frequent flier mile is to figure out its value for specific tickets and generalize from there. Below is a simple mathematical formula that requires us to plug in only a few numbers numbers. I’ll walk you through how to come up with those numbers with a few examples below.

Frequent Flier Miles Value Calculation

  1. Ticket Value- For the ticket we are acquiring with miles, we need the lesser of the ticket’s value to us and the ticket’s cost.
    • Example: A coach one-way ticket from LAX-PIT costs $200. Bill is flying to Pittsburgh to propose to his girlfriend, so he values the ticket at $5000. For the formula, we use the lesser of the cost ($200) and the value ($5000), so we plug in $200.
    • Example: Jacqueline lives in San Francisco and decides at the last second to go to Atlanta to watch UVA basketball play in the ACC Tournament. On the way, she wants to stop in Minneapolis to visit family. Last second tickets from SFO-MSP-ATL-SFO cost $1213. Jacqueline is not a rabid fan and sees her family several times a year, so she only values the chance to go take this trip at $450. For the formula, we use the lesser of the cost ($1213) and the value ($450), so we plug in $450.
    • Example of Premium International Travel: The most common time the cost and value diverge are for international first class travel. Jeff lives in Los Angeles and wants to book his dream vacation to see the Australian Open with a little exploration of Australia thrown in. He is also an expert on maximizing AAdvantage miles, so he knows he can get a free stopover in the international gateway city for as long as he likes. So he books JFK-LAX (June), LAX-SYD (January), MEL-LAX (January), and LAX-MIA (March). The transpacifics are in Qantas first class on A380s; the transcontinentals are on AA first class on 777s with fully flat seats. He plans on using the transcontinentals as half his airfare for upcoming vacations to New York and Miami. In cash, this itinerary would cost $25,700. To figure out his subjective value, Jeff looks at the cost of this itinerary in coach, which is what he would book if he had to use cash. The cheapest Australia itinerary in coach costs $1225, but it includes stops and is over 40 hours one way. Jeff values his direct flights $400 more than that and his first class a further $600 more. So he values the Australia part at $2225. He values the other first class legs, using the same process of finding the applicable coach fare and then adjusting for his valuation of first class and routing, at $700 total. So for the formula, we use the lesser of the cost $25,700 and his value ($2925 = $2225 + $700), so we plug in $2925.
  2. Taxes and Fees Associated with an Award Booking- Include all taxes, award booking fees (US Airways), phone ticketing fees, close in ticketing fees, and any other fees. This number should be easy to find, since it is the total amount the airline is trying to charge your credit card.
    • Bill purchased his flight within 21 days of departure online. United hits him with a $75 close in ticketing fee and $2.50 in taxes, so his total taxes and fees associated with the award booking are $77.50
    • Jacqueline purchases online and Delta does not charge close in ticketing fees. Her total taxes and fees are $7.50.
    • Jeff has to call a phone rep to book Qantas flights with AA miles. AA charges him a $25 phone fee plus taxes of $128. His total taxes and fees are $153.
  3. Miles Used- How many miles will the trip we are considering cost?
    • Bill found saver award space for the date he wanted. His trip cost 12,500 United miles.
    • Delta allows free stopovers domestically in cities that are along a legal routing. It is legal to route SFO-ATL through MSP. Because Jacqueline found low level availability on delta.com for her entire itinerary (she has magical powers), her total cost is 25,000 SkyMiles.
    • Jeff’s LAX-Australia roundtrip in Qantas first costs 145,000 AAdvantage miles. He craftily added the transcons in fully flat seats for no additional miles. Total: 145,000 miles.
  4. Miles Foregone by Not Purchasing Ticket- Use the Great Circle Mapper to calculate how many miles the trip would earn in coach if you paid the fare. Add in any mileage earning bonus you would receive if you have status on the airlines you are flying. Use the miles earned in coach even if your award is booked in first classunless you would have paid for a first class seat in cash if you had not used miles.
    • Bill’s PIT-LAX is 2136 miles, so he is forgoing 2136 miles by not purchasing his ticket with cash.
    • Jacqueline’s routing is 4634 miles, but she is a Delta Diamond Medallion flier, so she would earn a 125% mileage bonus on her miles flown if she purchased the ticket with cash, so she is foregoing 10,426 (4634 + 1.25*4634) miles by not purchasing the ticket with cash.
    • Jeff’s megatrip is 20,226 miles of flying, which is how many he’s foregoing by not purchasing the ticket with cash.

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In the examples above, on Bill’s trip, his United miles were worth 1.35 cents per mile. Jacqueline’s SkyMiles were worth 1.25 cents per mile, and Jeff got 1.68 cents per mile out of his AAdvantage miles. (These were realistic, but stylized examples. They are not my valuation of those currencies. For my valuation of those currencies, see the links at  the bottom of this post.)

Now calculate these four numbers for your award and plug them into the calculator above in the appropriate locations. If you know you will use your miles for the specific award you just entered, you are done. The calculator will spit out the value of that frequent flier currency to you. If you are considering a few possible awards with your miles, plug them all in to the calculator. Whichever awards shows the highest cents per mile, that is the award you should book. And its cents per miles is the value of the miles to you.

If, instead, you have a pile of miles in one currency and want to know their value but don’t have a specific award in mind, or you want to know the value of a credit card sign up bonus but don’t know exactly how you’d use it, then we will need to explore the specific programs more deeply to take into account their varying rules regarding overall availability, partner availability, one way awards, open jaws, stop overs, generosity of routing, close-in ticketing fees, change fees, and access to first class. For a specific award that you’ve already reserved, these things were all taken into account by the calculator above in either the Value or Fees fields. But if you don’t have an award in mind, then these all affect the value of the miles sitting in your account.

I’ll go in depth on each major mileage currency in future posts.

  1. US Airways Dividend Miles                                           1.95
  2. United Mileage Plus                                                        1.81
  3. American Airlines AAdvantage                                    1.77
  4. British Airways Avios                                                      1.70
  5. Southwest Rapid Rewards                                             1.69
  6. Delta SkyMiles                                                                  1.22

And the best way to earn miles quickly is with credit card sign up bonuses. Find the best offers here.



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