Hey! You’re reading an outdated Free First Class Next Month series. Check out the latest version published in April of 2015 here.
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:
Frequent Flier Miles Value Calculation
- 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.
- 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.
- 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.
- 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.
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.------------------------------------------------------------
Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.
Earn 50,000 bonus points (worth $800 in American Airlines flights) after spending $3,000 in the first three months on the Citi Prestige® Card. Plus get a $250 Air Travel Credit each calendar year, free airport lounge access worldwide, and your fourth night free on hotel stays. Why I got the card.