Category Archives: Airtran

750 Free Southwest Rapid Rewards for 20 Seconds of Work

Three weeks ago I got an email from AirTran A+ Rewards with the subject “Get 750 Rapid Rewards Bonus Points.”

The email explains that Rapid Rewards and A+ Rewards, Southwest’s and AirTran’s loyalty programs will merge on November 2, 2014. (Southwest acquired AirTran in May 2011.)

If you verify your A+ and Rapid Rewards accounts to make that combination easier on the airline, you can get a quick 750 Rapid Rewards, worth about $11 in free flights. This took me about 20 seconds, so I thought it was a good return on investment.

  • How can you get the 750 points?
  • What amazing arbitrage opportunity will end November 2, 2014?

Continue reading

Southwest and AirTran Get Cozier: What It Means For You

According to this thread on FlyerTalk, Southwest Airlines has started to display bookable AirTran flights on its own website. The first AirTran city pairs offered on Southwest.com are Atlanta <-> Fort Lauderdale and Atlanta <-> Fort Myers. A sample screenshot of the newly available flights is below.

These flights are still bookable on AirTran’s website. The prices for economy and business appear to be the same, though no equivalent to “Anytime” economy fares is offered by AirTran.

Why should I book AirTran flights on Southwest’s website?

You should book this flight through Southwest if you are flying in economy and checking a bag. Southwest allows two free checked bags. AirTran, on the other hand, charges $25 for the first checked bag and $35 for the second.

Why should I book AirTran flights on AirTran’s website?

AirTran offers the ability to select your seat. You pay for this privilege, though. The cheapest seats are $6 per segment. If you decline to pay, you can select your seat when checking in, no earlier than 24 hours before the flight.

If you are an AirTran elite, the seat selection fee is waived. You also receive free checked bags and the possibility of complimentary first class upgrades at the gate. It definitely makes sense to book with AirTran directly in this case.

What about earning? Is it better to earn A+ credits or Southwest Rapid Rewards points?

That depends on the price of the flights and how much you fly AirTran. Scott wrote a good post on How to Exploit the Southwest-AirTran Merger. He also detailed the conversion ratios between Rapid Rewards points, Rapid Rewards credits, and A+ credits. The exchange ratios are below:

  • 1,200 Rapid Rewards points converts to 1 A+ credit
  • 1 Rapid Rewards credit to 1 A+ credit
  • 1 Southwest Standard Award (two oneways) to 16 A+ credits
  • 1 A+ credit converts to 1 Rapid Rewards credit
  • 16 A+ credits can be used to fly two oneways on Airtran, and 16 Rapid Rewards credits can be used to fly two oneways on Southwest.

Some people are visual learners, so Southwest has a handy website to help explain all the possible conversions. They also produced a chart to show the available transfers.

If you are still reeling from all of this, here is a basic explanation. Rapid Rewards points are a fixed value point system. The number of points needed to book an award ticket is dictated by the price of the fare.

19,200 Rapid Rewards points are worth approximately $324 (1.69 cents each according to the Mile Value Calculator). The same 19,200 Rapid Rewards points convert into 16 A+ credits or 16 Rapid Rewards credits, which are enough for a roundtrip award ticket. 1,200 points = 1 credit.

If you can find an award ticket that costs more than approximately $324 cash, it makes sense to convert 19,200 Rapid Rewards points into credits for a standard AirTran or Southwest award. Just be sure to verify that there is standard award space on your desired flights before making the conversion.

So what’s the final call?

You must decide between Rapid Rewards points and credits. A standard roundtrip flight will earn 2 A+ credits, but the Rapid Rewards points you could earn vary depending on flight prices.

For example, if your roundtrip ticket earns 2,000 Rapid Rewards points versus 2 A+ credits for each segment, AirTran appears to be the site to book with. 2,400 Rapid Rewards points converts to 2 A+ credits. However, I don’t think you should always look at it from this standpoint.

More than anything, I value the flexibility of Rapid Rewards points over A+ credits. Unless you fly AirTran regularly, it might be hard to accumulate the 16 credits required for an award ticket.

Accumulating Rapid Rewards points allows you to book Southwest award flights when needed. You can also convert 19,200 points into 16 credits if the award you want costs more than approximately $324 out of pocket and there is standard award space available.

Recap

A few AirTran flights are now bookable on Southwest.com. I’m sure more will be added in the coming weeks as both carriers are inching (very slowly) towards completing their merger.

If you don’t hold elite status with AirTran, I would book any AirTran flights on Southwest’s website that I could. Checked bags are free and you earn Rapid Rewards points which can be used on Southwest flights. Rapid Rewards points also convert into A+ or Rapid Rewards credits, which could make sense if you are booking an award flight that costs more than $324.

Reader Question: Should I transfer Southwest Points to AirTran Credits?

Joanne writes:

“I have accumulated approximately 55,000 Southwest Rapid Rewards. I see that I have a Southwest flight credit that is expiring, and Southwest wants me to use 18,000 points to create a reward flight. I have my eye on a roundtrip award to Phoenix that costs 29,000 points. Is it worth it to do this? I am so confused. Any help is appreciated.”

I can sympathize with Joanne’s confusion. Southwest’s merger with Airtran has created several types of reward currencies between the two airlines including Rapid Rewards points, Rapid Rewards credits, Rapid Rewards awards, and A+ Credits. The good news is that the proliferation of currencies presents some pretty easy opportunities to get more value than normal from your Southwest and Airtran rewards.

Normally, Southwest Rapid Rewards are fixed value. You earn 6 per dollar spent on the cheapest fares, and you redeem 60 per dollar for any ticket in the cheapest fare class. I’ve discussed the standard redemption process before. See Anatomy of an Award: How to Book an Award on Southwest.

I’ve already detailed the main opportunity to stretch your Southwest point value too. If you transfer your Rapid Rewards points to A+ credits, then your new A+ credits to a Rapid Rewards award, you can get a roundtrip award (or two oneways) for 19,200 Rapid Rewards points. This process may sound complicated, but it takes about two minutes. See my post on this process titled How to Exploit the Southwest-Airtran Merger.

Let’s look at the the mechanics of the now allowable conversions between Rapid Rewards and A+ that I’ve been doing for the last seven months:

1,200 Rapid Rewards points converts to 1 A+ credit

1 Rapid Rewards credit to 1 A+ credit

1 Southwest Standard Award (two oneways) to 16 A+ credits

1 A+ credit converts to 1 Rapid Rewards credit

16 A+ credits can be used to fly two oneways on Airtran, and 16 Rapid Rewards credits can be used to fly two oneways on Southwest.

Joanne’s situation is that she has one Rapid Rewards credit and 55,000 Rapid Rewards points. Her credit is about to expire worthless. But since she has the credit for the moment, she only needs 15 more to get a Southwest Standard Award. That means she only needs 15 A+ credits, which means she only needs to convert 18,000 Rapid Rewards to get two free oneway or one free roundtrip. Or in visual form:

 

Is it a good deal for Joanne to transfer 18,000 Rapid Reward points in this manner? That answer depends on two things.

1) Would the roundtrip or two oneways she books with her newly minted Southwest Standard Award cost more than 18,000 Rapid Rewards?

2) Is there availability on the flights she wants with her Southwest Standard Award?

The first is easy to figure out. On any Southwest search results screen, you can toggle between seeing fares in dollars and seeing them in points.

Joanne found that the roundtrip she wanted to Phoenix cost 29,000 points, so 18,000 points would be a steal.

But would she be able to use her award for the flights she wanted? Southwest Standard Awards–unlike points awards–are capacity controlled, much the same way that United or American awards are capacity controlled.

To find out if the flights she wanted to Phoenix had award space, Joanne should call Southwest at 1-800-445-5764 to ask if those flights have standard award space. If they have the space, she can make the conversions and book over the phone without a phone-ticketing fee. Her 18,000 points will get her those 29,000-point flights.

In my experience, Southwest’s capacity-controlled awards have pretty phenomenal availability, so I don’t expect Joanne to have much of an issue getting the flights she wants.

How can you figure out if you should make points transfers like Joanne?

Because there are unlimited transfers between the programs, it means that we can use 19,200 (1,200 * 16) Rapid Rewards points for two free oneway trips on either airline.

19,200 Rapid Rewards points are worth about $324, so if you can find two oneways on either airline that cost more than that, you can profit from transferring.

In today’s airfare environment, finding a roundtrip or two oneways that cost more than that is pretty easy, especially since Airtran flies internationally to Mexico and the Caribbean.

Let’s go through some examples to show how to determine whether you can exploit the transfer options.

LAX-MDW-LAX for the dates I want costs $408, and I value it at that price because I need to get to Chicago, and there are no cheaper options. In Rapid Rewards points it costs 23,160 and $5. This is a prime example of a fare where exploiting the transfer options saves money!

Instead of paying cash or 23,160 points, I can transfer 19,200 Rapid Rewards points to A+ credits. The transfer is instantaneous. I can then immediately transfer 16 A+ credits to 16 Rapid Rewards credits. After that instantaneous transfer, I now have two free oneways on Southwest that I can use to fly LAX-MDW-LAX for just the same $5 in taxes.

So I got an itinerary for 19,200 Rapid Rewards points that should have cost me 23,160 Rapid Rewards points. Exploiting the transfers saved 3,960 Rapid Rewards points with a value of $63.54! Awesome!

Here’s an easy example of when not to transfer. I want to fly LAX-LAS-LAX, and the flights I want cost $114 or 5,520 Rapid  Rewards points and $5. Transferring 19,200 Rapid Rewards points to 16 A+ Credits to 16 Rapid Rewards credits would be folly. Instead I would just book with 5,520 points and $5.

Now that you know when to transfer, here’s how to transfer. It’s incredibly easy.

  • Log in to your Southwest account on the right side of southwest.com
  • Click on the My Account link that appears where you typed your password.
  • Click on the My Rapid Rewards tab.
  • Choose the Transfer Between A+ Rewards and Rapid Rewards button on the left side of the page.
  • Type in your Airtran account information, then follow the instructions to transfer Rapid Rewards points to A+ Credits (then A+ credits to Rapid Rewards credits if you are booking with Southwest)

Recap

This transfer option has made Southwest’s program much more lucrative for the last seven months. For short cheap flights, the normal points price will remain incredibly low, sometimes just a few thousand points for a roundtrip. For longer, more expensive flights, though, a roundtrip is effectively capped at 19,200 points, so we get the best of both worlds: points-cheap short trips and points-cheap long trips.

I hope everyone seriously looks into these transfers for their ability to use up orphaned Rapid Rewards credits, use up orphaned A+ credits, and save a bundle on expensive Airtran and Southwest flights.

Master Thread of Which Airline Gift Cards American Express Reimburses

The American Express Platinum Card is one of the best credit cards for frequent travelers. The card comes with Delta, American, US Airways, and Priority Pass Select lounge access. (American/US lounge access ends 3/22/14.) Coupled with no foreign transaction fees and $100 towards Global Entry, this is a great all around travel card.

Many people balk at this card due to the $450 annual fee. However one of the biggest incentives to get the card is you can get $400 worth of of airline fees reimbursed by American Express in your first year of being a cardholder.

That’s because the $200 annual airline fee reimbursement is a calendar-year benefit.

This fee reimbursement should apply to baggage fees, change fees, award ticketing fees, and other fees. It should not apply to purchased tickets or purchased gift cards. But American Express does code many gift card purchases as fees that it then reimburses.

For instance, I got my AMEX Platinum in November 2011. I immediately designated American Airlines as my 2011 airline for fee reimbursement and purchased three $67 gift certificates from aa.com. I received a $200 statement credit within a few days.

In January 2012, I changed my airline to United for 2012 fee reimbursement. I bought a $200 gift certificate from united.com, and again I received a $200 credit within days.

Those $400 in gift cards almost completely “eliminated” the $450 annual fee.

I just got the AMEX Platinum.  How do I choose my designated airline for the year?

After signing up for the card, you should immediately register your card with American Express through this link. You will then be asked to select your chosen airline for the calendar year. For reference, the page looks like this.

After I make my airline selection for the year, can I switch if I change my mind?

No. You must choose carefully. Your selection can’t be changed until January of the following year. Once you make your choice, you are locked in for that calendar year.

That means you should pick an airline where you will run up $200 in fees in a year or one whose gift cards AMEX reimburses.

I just made an eligible purchase with my card, what will a reimbursement from AMEX look like on my billing statement?

Most are reporting that the fee reversal posts as “AMEX Airline Fee Reimbursement.” It should post within two-three weeks of making the eligible purchase.

What is the best use of this airline fee reimbursement?

Everyone’s situation is different, but using the $200 credit for gift certificates is very handy. If you know you have travel plans on that airline, then you are essentially reducing the annual fee of the card by $200. Like I mentioned above, this is a calendar year benefit, so you can get $400 off the first year’s $450 annual fee!

Which airlines allow you to purchase gift certificates and which will American Express refund properly?

I’ve collected the wisdom of the various FlyerTalk threads on gift-card reimbursement.

AirTran Airways

As of December 5, 2011, AirTran no longer sells gift certificates. This is not a viable option. Keep in mind, though, that AirTran is merging with Southwest Airlines. Check out the Southwest Airline section below for details.

Alaska Airlines

According to this thread on FlyerTalk, there are some very recent conflicting reports about being reimbursed for Alaska gift cards. Until very recently, purchasing Alaska gift cards in $50 or $100 increments was no issue. AMEX Platinum reimbursements posted within several days. However, two recent posters note that the charge posts to their account as “ALASKA AIR GIFT CERTSEATTLE WA.” They have not received credit for these purchases most likely due to this new coding. It looks like buying Alaska gift cards and getting reimbursed is dead. If you still want to try your luck, click this link to purchase e-gift certificates for Alaska.

American Airlines

FlyerTalkers are still noting success in purchasing low denominations of e-gift certificates. AMEX appears to be reimbursing $50, $75, and $100 increments without any issues. American Airlines sells both physical cards and e-gift certificates through the same landing page here. To expedite your order, I highly suggest purchasing an e-certificate on the right side of the page.

Delta Airlines

As hard as it is to believe, Delta Airlines does not sell gift certificates (physical or e-certificates) on its website. They must be purchased at airport ticket counters in the United States. To make matters worse, Delta gift certificates are not available for purchase in California, Connecticut, Hawaii, Illinois, Maine, Massachusetts, New Hampshire, or Rhode Island. The FlyerTalk thread does note success with incidental charges like stand by fees, change fees, and Economy Comfort seat purchases, and checked bags.

Note that some FlyerTalkers are also reporting that inexpensive tickets (<$150) are being reimbursed by AMEX.

Frontier

There are no data points on FlyerTalk nor MilePoint about any reimbursements. I would choose another airline to use the $200 credit.

Hawaiian Airlines

Hawaiian Airlines does sell e-gift certificates here, but there are no reports on the small FlyerTalk thread about anyone using their AMEX Platinum to buy them. Unfortunately, there isn’t enough evidence to make a conclusion either way, but I might try to talk my dad into being the guinea pig since he is a frequent inter-island flyer.

JetBlue Airlines

There have been no successful reimbursements reported in the short FlyerTalk thread about JetBlue gift certificate purchases. This does not appear to be a viable option.

Spirit Airlines

There are no datapoints on FlyerTalk nor MilePoint about any reimbursements. I would choose another airline to use the $200 credit.

Southwest Airlines

Recent posts in this FlyerTalk thread indicate that this door might be closing. Reports from 2011 and early 2012 show that getting reimbursement for $50 or $100 gift certificates was no issue. However, it appears now that the reimbursements are not automatically posting. I would proceed with caution if choosing Southwest. If a gift certificate purchase does not post, there are not a lot of other uses for the credit. Southwest does not charge for checked bags or change fees, and doesn’t have any airport lounges. To purchase physical or e-gift certificates, click this link.

United Airlines

This thread on FlyerTalk notes that many are having success with gift card purchases and quick reimbursements. $50 and $100 increments appear to have the highest success rate, while a one time $200 purchase has been hit or miss in being covered by American Express. ($200 worked for me!) To play it safe, I would purchase four $50 certificates or two $100 ones to not draw attention to the transactions. To purchase, simply go to this link and click on the Purchase button. Note that I had some trouble with a flight I purchased using my United gift certificates bought with my AMEX Platinum. For more details, read my post, American Express/United Gift Card Trouble.

US Airways

Though the thread is scarce with recent anecdotes, it appears that purchasing US Airways gift certificates will work. Some have reported success with one $200 purchase while others have been buying two $100 certificates. Be warned, though, as US Airways does not have e-gift certificates. The physical cards must be mailed, and any order you place will incur a $15 shipping fee. If you purchase two $100 certificates, the total will come out to $215, and AMEX should reimburse up to $200. To purchase gift certificates line, follow this link.

Recap

The American Express Platinum card appears to have a high $450 annual fee. However, you can greatly reduce the fee by using your $200 airline credit each calendar year on gift certificates.

This thread has summarized which airlines’ gift certificates American Express is reimbursing.

Free Giveaway and Nuggets 9.21.12

1. Frugal Travel Guy posted an awesome rundown of the major credit-card issuers’ rules on how far apart applications must be and how churnable their bonuses are. I have it bookmarked for my future use. Highlights:

  • An AMEX card must be closed one year to get a new bonus on the exact same card. Cannot open “similar” products within 90 days of each other and get both bonuses.
  • A CHASE account must be closed two years to get a new bonus on the exact same card.
  • CITI applications must be 18 months apart to get a new bonus on the exact same card. (Note the difference. This clock has to do with applications. The other two have to do with account closures.)

 

2. Earn double Rapid Rewards on Southwest flights between now and November 15 by signing up for the promotion at the link.

Hopefully most of your Southwest flights are the cheapest Wanna Get Away variety. Normally those earn 6 Rapid Rewards per dollar, but under this promotion you will earn 12 Rapid Rewards per dollar for flights flown by 11/15.

Twelve Rapid Rewards are worth 20.3 cents, so this is a substantial rebate.

3. Earn double A+ Credits on AirTran flights between now and November 14. Earn triple A+ credits on international flights.

A+ credits can be converted to 1,200 Rapid Rewards each, so a oneway AirTran ticket would earn $40.56 cents worth of future Southwest flights. That’s a substantial rebate too!

4. Don’t forget about the ability to transfer between Southwest points and AirTran credits. I outlined how a few instantaneous transfers can save you thousands of points five months ago, and the technique still works. See How to Exploit the Southwest-AirTran Merger.

A twitter follower saved 8k points using the trick yesterday!

5. My pet project has been opening up the SkyMiles Auction page every morning. I haven’t seen any good deals yet–even at my 1.2 cents per mile valuation. But I think it’s possible there is an occasional good deal since many of the auctions are experiences or the opportunity to meet someone you might be a big fan of. Most of the locations of the experiences are Delta hubs like Minneapolis or Cincinnati. That’s also where people have a ton of SkyMiles, so one obvious tip is to look outside those cities–like the Boston College football experience.

6. Just like last Friday I’m giving away a free GoGo single-flight inflight internet pass. Comment below for a chance to win a single-flight pass that expires 12/31/12.

Gogo internet is available on select planes on Air Canada, AirTran, Alaska, American, Delta, Frontier, United, US Airways, and Virgin America.

The next giveaway might only be open to my twitter followers–@milevalue–and facebook fans–facebook.com/milevalue–so make sure you’re one of those!

Free First Class Next Month: Signing Up for Airline and Hotel Programs

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

This is the second 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.

In just a few days, you’ll be earning hundreds of thousands of frequent-flier miles and hotel points, and you need a place to put them. Below are the bare minimum programs you need to be a member of as a US-based traveler, and as you get more involved with the miles game, you’ll probably sign up for more.

By signing up for these programs, you’ll be able to take advantage of every major miles promotion, and you’ll be able to fly domestically and internationally for free and stay for free once you get there.

Each one should just take a moment to sign up for. Don’t skip any even if you’ve never flown the airline or don’t want to go where it flies. We often use one airline’s miles to fly its partners. For instance, I just used my British Airways miles to fly from LA to Honolulu on American Airlines.

If you already have an account, then instead of signing up, just activate your account online. Write down your username or number and passwords all in one place, we’ll need them again very soon.

Airlines

AirTran (recently bought by Southwest, so joining unlocks a trick with Southwest points)

American Airlines

British Airways

Delta Airlines

Hawaiian Airlines

Southwest Airlines

United Airlines (if you had a Continental Onepass account, United automatically rolled that into a Mileage Plus account)

US Airways

Hotels

Club Carlson

Hilton

Priority Club

Starwood

If you fly any other carriers like Virgin America or JetBlue, you should also sign up for their programs, but if you don’t fly them, you can stick to the eight listed airlines. If you’re an avid couchsurfer, you can skip signing up for the hotels.

Continue to Post 3.

The Five Types of Frequent Flier Miles

There are five basic types of frequent flier miles. I’ll detail each, including how best to take advantage of them. Then I’ll explain why it’s important to diversify across the types (not just across frequent flier programs.)

1) Region-to-region based miles. American, Delta, United, US Airways, etc

Region-to-region miles are the most common type of miles. These miles can be redeemed according to award charts, so a flight from North America to Europe costs a certain amount of miles regardless of where in North America and where in Europe and regardless of the (valid) routing. These miles are earned by buying paid tickets. The earnings depends on how many miles your paid ticket’s routing is.

Strategy: Buy cheap paid tickets, possibly with circuitous routings to earn miles. Redeem the miles for expensive tickets, especially premium classes, and especially to expensive-to-reach airports within a region. For instance these miles are put to better use to fly into Seville, Spain compared to flying into London. Also, many of these programs allow free stopovers, free open jaws, and even free oneways for no additional miles. Exploit those opportunities.

2) Fixed-value miles. Southwest, JetBlue, Virgin America

“Revenue-based” might be a more appropriate name since the value varies slightly because of taxes and other factors. The miles price of a ticket is based on the cash price of a ticket regardless of where the flight goes. Some airlines have a minimum amount a flight can cost in points, JetBlue at 5,000 oneway, and some have a maximum, Southwest at 19,200 roundtrip. These miles are earned by buying paid tickets at a set ratio of miles earned per dollar spent on the ticket, again regardless of where or how far the flight goes. Fixed-value miles are the only type that allow you to book any flight with miles; there is no need to worry about availability.

Strategy: Use the miles for cheap tickets. A roundtrip from LA to Vegas could be under 5,000 Rapid Rewards points, while it would cost 25,000 miles using region-to-region miles. The best way to earn the miles is by flying expensive tickets. If a last-minute fare between LAX and Vegas is going for $400 on United and Southwest, buy from Southwest. It will earn you six times the $400 for 2,400 Rapid Rewards points, while the United ticket will earn 1,000 miles.

3) Distance-based miles. British Airways Avios

Miles are earned in the same way as region-to-region miles, by flying paid tickets and earning one Avios per mile flown. Miles needed for an award are calculated by adding up the miles needed for each flight on an award. The miles needed for each flight are calculated by the distance of the flight. All flights within a certain band, 0-650 miles say, cost 4,500 Avios. Flights from 651-1151 cost 7,500 Avios and so on.

Strategy: Use the miles for short hops between expensive city pairs. Quito to Lima for 7,500 Avios plus taxes is a steal, for instance, because airfare between those cities can cost hundreds and hundreds of dollars.

4) Credits for flights. Airtran, vestiges of Southwest’s old program

One credit is earned per paid oneway whether that oneway is Tampa to Atlanta or Tampa to Las Vegas. A certain number of credits (8 for Airtran) equals a free oneway, whether it’s from Tampa to Atlanta or Tampa to Vegas.

Strategy: Buy cheaper, probably shorter flights to earn credits. Use the credits on more expensive, probably longer flights. For example eight roundtrips from Tampa to Atlanta on Airtran earns a roundtrip from Tampa to Las Vegas. Airtran and Southwest have merged, and both credit programs are being completely replaced by Southwest’s fixed value scheme. But while they last, there are some great earning and redemption opportunities.

5) Transferable Miles. Chase Ultimate Rewards, American Express Membership Rewards, SPG Starpoints

These points are not earned by flying at all. Each program has different transfer partners with different transfer ratios.

Strategy: Keep the miles in the transferable points program until you have a redemption in mind unless a transfer bonus is ending that is too good to pass up. That allows you to maintain the option value of having many transfer options, and it allows you to use the miles for their most profitable use: topping up accounts that are just short of a dream award.

Those are the five types of miles; did you notice they all have different exploitation strategies? That’s why it’s so important to diversify across the types of miles. You want to have the best mile for the job, and you want to use the types of miles in concert.

For instance, imagine you live in Las Vegas, and you want to take a dream vacation to Peru, Chile, and Argentina in business class. You recognize that you want to use region-to-region miles for your main award, since they offer the best value for a trip between the US and South America, especially in business class. But you can’t find any award space out of Las Vegas, only Los Angeles. For the $120 roundtrip flight between Vegas and LA, you’ll want to use fixed-value miles. On Southwest, these flights would be about 6,000 points many days of the week.

Then from Los Angeles, you can fly to Lima and return from Buenos Aires in business class with region-to-region (probably American Airlines) miles. Once you’re in South America, British Airways’ distance-based Avios will almost certainly be the best option for travel among the South American cities. Using the different types of miles in concert unlocks all of their best value redemptions.

Another reason to diversify among the miles is the same reason you should diversify any type of asset: the same returns with lower variance. Changes in the airline industry affect different types of miles differently, so a hedge against those changes is to hold all types. For instance, higher fares this year have devalued fixed-value miles–it takes me more points to fly the same routes–but has had no effect on region-to-region or distance-based miles–I can still fly the same routes for the same price. This has, in turn, increased the cash value of region-to-region and distance-based miles.

This post had two main points: use the right mile for the job by understanding the best uses of each type and diversify your mile holdings not just across programs but across mile types.

Follow me on twitter @milevalue

How to Exploit the Southwest-Airtran Merger

Update 6/8/13: This trick is still active!

Southwest Airlines and Airtran Airways are merging. This week the airlines announced that for the time being, transfers will be allowed between Southwest’s Rapid Rewards loyalty program and Airtran’s A+ loyalty program.

This presents an arbitrage opportunity similar to the one I detailed last week, which involved converting Rapid Rewards points to Rapid Rewards credits to save a bundle when booking expensive Southwest flights.

First let’s look at the the mechanics of the now allowable conversions between Rapid Rewards and A+:

1,200 Rapid Rewards points converts to 1 A+ credit

1 Rapid Rewards credit to 1 A+ credit

1 Southwest Standard Award (two oneways) to 16 A+ credits

1 A+ credit converts to 1 Rapid Rewards credit

16 A+ credits can be used to fly two oneways on Airtran, and 16 Rapid Rewards credits can be used to fly two oneways on Southwest.

So what does all this mean, and how can we exploit it. Because there are unlimited transfers between the programs, it means that we can use 19,200 (1,200 * 16) Rapid Rewards points for two free oneway trips on either airline.

19,200 Rapid Rewards points are worth $324, so if you can find two oneways on either airline that cost more than that, you can profit from transferring.

In today’s environment of sky high fares, finding a roundtrip or two oneways that cost more than that is pretty easy, especially since Airtran flies internationally to Mexico and the Caribbean.

Let’s go through some examples to show how to determine whether you can exploit the transfer options.

LAX-MDW-LAX for the dates I want costs $408, and I value it at that price because I need to get to Chicago, and there are no cheaper options. In Rapid Rewards points it costs 23,160 and $5. This is a prime example of a fare where exploiting the transfer options saves money!

Instead of paying cash or 23,160 points, I can transfer 19,200 Rapid Rewards points to A+ credits. The transfer is instantaneous. I can then immediately transfer 16 A+ credits to 16 Rapid Rewards credits. After that instantaneous transfer, I now have two free oneways on Southwest that I can use to fly LAX-MDW-LAX for just the same $5 in taxes.

So I got an itinerary for 19,200 Rapid Rewards points that should have cost me 23,160 Rapid Rewards points. Exploiting the transfers saved 3,960 Rapid Rewards points with a value of $63.54! Awesome!

Here’s an easy example of when not to transfer. I want to fly LAX-LAS-LAX, and the flights I want cost $114 or 5,520 Rapid  Rewards points and $5. Transferring 19,200 Rapid Rewards points to 16 A+ Credits to 16 Rapid Rewards credits would be folly. Instead I would just book with 5,520 points and $5.

Now that you know when to transfer, here’s how to transfer. It’s incredibly easy.

  • Log in to your Southwest account on the right side of southwest.com
  • Click on the My Account link that appears where you typed your password.
  • Click on the My Rapid Rewards tab.
  • Choose the Transfer Between A+ Rewards and Rapid Rewards button on the left side of the page.
  • Type in your Airtran account information, then follow the instructions to transfer Rapid Rewards points to A+ Credits (then A+ credits to Rapid Rewards credits if you are booking with Southwest)

This transfer option makes Southwest’s program temporarily much more lucrative. For short cheap flights, the normal points price will remain incredibly low, sometimes just a few thousand points for a roundtrip. For longer, more expensive flights, though, a roundtrip is effectively capped at 19,200 points, so we get the best of both worlds: points-cheap short trips and points-cheap long trips.

I hope everyone seriously looks into these transfers for their ability to use up orphaned Rapid Rewards credits, use up orphaned A+ credits, and save a bundle on expensive Airtran and Southwest flights.