Free First Class 2014: Airline Mile Redemption Basics

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This is the eleventh 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 flyer miles, and my goal is that by the end, you know enough to fly for free anywhere you want to go.

The beginners posts on redeeming miles and points are done. The series moves to the more important, and more interesting, question of redeeming miles and points.

I think earning miles is less interesting because it is relatively easy to open the credit cards with the best sign up bonuses and meet their spending requirements. Plus I offer a free service telling you which cards are best to open for your trip goals.

Redeeming miles and points offers so many interesting choices and actually turns your dream trip into a plane ticket or hotel stay. (Of course, you can skip all the posts on redeeming miles and outsource the work to my Award Booking Service for $125 per person.)

I’ve never put in one places all the options for redeeming miles and points, so that beginners can understand where there miles and points can take them.

  • How do you hotel redemptions work?
  • Why do I always plan hotels last when booking a trip with points?
  • What cabins can you book with frequent flyer miles?
  • Why are some miles way better for domestic trips and some way better for international trips?
  • Should you use your miles for awards or upgrades? What’s the difference?
  • What else besides flights can you redeem miles for?
  • What are stopovers, open jaws, and free one ways?

Hotel Redemptions

Redeeming hotel points for hotel stays is extremely easy in most cases. Many major hotel programs like Starwood, Hyatt, Hilton, and IHG have no blackout dates for award redemptions.

That means that if a standard room is available for sale, you can book it with points, and the points price is determined by the hotel’s “Category,” not its price that day in case you pick an ultra-peak day.

Because these programs have no blackouts, it is extremely easy to use their points for redemptions relatively late in the planning process. That’s why I always start my trip planning by earning enough miles for my flights and booking those flights before moving on to earning hotel points and booking hotels.

Miles Redemptions

Redeeming miles is much more complex. You have a ton more options of how to use the miles and ton more you can do to get more value from your awards.

Blackouts

“Blackout dates” are somewhat of a misnomer when referring to redeeming airline miles. Most airlines now release award seats on almost every flight (United) or every flight (American Airlines) at varying miles prices.

For the legacy carriers like United and Delta, you want to use miles at the Saver or Low price. Booking awards at the Standard, Medium, High, or Anytime price will result in paying double (or more) the number of miles that booking a Saver award costs.

Of course, the trick is finding and booking Saver award space. I think of it like this: airlines release Saver award seats when they don’t expect to sell all the seats on a certain flight. That means I may not find Saver space a week before Christmas when everyone is traveling and the airlines do expect to sell all the seats.

The best way to find Saver award space is to be flexible, dogged, and prepared well in advance. Most airlines start releasing award space 11+ months in advance. That’s not always the best time to find Saver award space, but it is always the best time to start looking.

The longer you give yourself to find Saver award space, and the more days you can fly, the more success you’ll have because award space is constantly changing. Once it opens up on a day you can travel, snag it.

Finally, airlines only have access to award space that their partners release at the Low or Saver level. US Airways can book American Airlines “MileSAAver” award space but not “AAnytime” space. The good part about this is that booking an airline’s partner’s space always prices at the Saver level.

Cabin

Most miles can be used to book economy, Business Class, or First Class. There are exceptions (a non-exhaustive list):

  • Most domestic flights only have two cabins, usually called economy and first.
  • Southwest points and Frontier miles can only be used to book Southwest and Frontier flights respectively, which only feature economy.
  • Delta miles cannot be used to book international First Class on any of its partners.

If you used cash to book your international tickets, Business Class is often 3x the price of economy, and First Class might be 10x the price of economy. With miles, business is usually more like 60-100% more than economy and first is more like 90-200% more than economy.

Relative to cash, using miles for premium cabins is a bargain. I often use my miles for international Business and First Class to take advantage of flat beds and a level of luxury I can’t afford.

Domestic versus International

Airlines miles that are booked according to a chart are best for international flights and premium cabin flights. (American, United, Delta, US Airways, Air Canada, Lufthansa, etc)

This is because the charts over price domestic economy relative to other awards. Why pay 25,000 miles roundtrip in economy from Cleveland to Dallas when you can pay only 110,000 miles roundtrip in flat bed Business Class all the way to Thailand?

Airline miles or points that give you a fixed value per point are best for domestic flights and economy flights. (Arrival miles, ThankYou Points, Southwest points, etc)

Fixed value points are terrible for expensive flights like international First Class because the more expensive the cash ticket is, the more expensive the award price is with those miles.

Awards vs. Upgrades

In short: Never book an upgrade with your miles.

Upgrades might have been a good deal 10 years ago, but they are a terrible deal now. Let’s compare a European trip in Business Class booked as an award and as an upgrade with United miles.

An award would cost 115,000 United miles and $100+ in taxes roundtrip depending on the exact country you visit.

An upgrade would cost:

  • $1,000 roundtrip for the cash ticket if you get a good deal
  • 20,000 United miles + $550 co-pay to upgrade each way

That’s a total of $2,100 and 40,000 miles. That’s an exorbitant out-of-pocket cost, but that isn’t unique.

Both routes require finding award space, and the upgrade route actually hamstrings you because you need to find award space on your paid booking whereas with an award, you can happily find award space on any routing.

If you want to book Business Class and First Class, book awards not upgrades.

Non-Flying Redemption

Don’t redeem your miles for things. The cents per mile you get from redeeming your airline miles for iPad is putrid. You can get a better deal redeeming miles for flights.

Extra Cities on Award Redemptions

On your award redemptions, you can see extra cities by maximizing open jaws, stopovers, and free one ways.

Open jaws are flying into one city and out of another. I use them when I want to see many places on a single trip and ground transportation is the most efficient connector between the cities. The open jaw award saves me from having to spend the time and money to get back to where I started at the end. Full post on open jaws including the one thing everyone misunderstands.

Stopovers are stops of longer than 24 hours at a city that isn’t your destination. Adding a stopover doubles the number of cities you’re visiting on an award, so it is usually a no-brainer for me.

Free one ways are extra one way trips from your home airport that are separated from the main award by months. They are the first half of your airfare for your next trip, but you can add them on to this award for zero extra miles. For more information, see Introduction to Free One Ways.

Different miles have different rules for stopovers, open jaws, and free one ways. Consult the mile-specific posts that are coming up in this series for more info.


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.

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