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Are you better off using Avios or American Airlines miles for a trip to South America?

I’m at the beginning of probably nine months of travel, with almost no flights booked and only the vaguest sense of where I’ll head and how I’ll get there. I’m having an absolute blast in Bogota, Colombia, so I think I want to go to Cali or Medellin, Colombia after a quick trip back to the United States.

I am looking at flying from Philadelphia to Colombia in about two weeks, and my most convenient options–one stop in Miami versus 2+ stops–are on oneworld flights. I can book those flights with American Airlines miles, British Airways Avios, or cash.

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Things are complicated further by close-in ticketing fees, Cash & Avios awards, my point valuations, and my mileage balances, so I thought what better way to tease out the best value than a little early-morning math!

Even if you never want to go to Colombia (big mistake!) or you mainly focus on miles other than American and British Airways, this post should illuminate how to decide which miles to use for a certain trip and whether to use miles at all or just to pay cash.

  • Which is the best value to Colombia: AA miles, BA miles, or cash?

The Options

The cheapest cash ticket I can find two weeks out for this one way trip is $602.

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I would pay that if I had to, but I don’t have to.

American Airlines has award space on the same flights. The award prices at 17,500 AA miles (parts of the year are 15,000 miles) + $95.60. That’s $20.60 in taxes and $75 for booking within 21 days of departure. I haven’t tested whether the trick to avoid the United close-in ticketing fee works on American Airlines awards, and for this post I’ll assume that the trick would not work.

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British Airways charges 17,500 Avios and $20.60 for the same flights.

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Two notes on the British Airways award possibilities.

First, I can actually pay six different Avios/cash amounts. The fewer Avios I use, the more cash I’ll have to pony up. Here is a full post on Avios & Cash awards.

Second, it is just by chance that this award costs both 17,500 Avios and American Airlines miles. Avios awards cost the sum of every segment’s cost, which is in turn determined only by the distance flown and the cabin. In this case, Philly to Miami is 7,500 Avios and Miami to Cali is 10,000 more.

The Analysis

To compare these options, we need to put them into a common currency. I’ll convert the cost of each award to dollars by valuing the miles needed for the awards.

A lot has changed since I valued American Airlines miles at 1.77 cents each and Avios at 1.7 cents each, but I’ll use those values because they are still roughly accurate.

Which Cash & Avios Award is Best?

The first thing I’ll do is eliminate five of the six Cash & Avios options.

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I consider the best deal to be 6,500 Avios + $165.60. It saves 11,000 Avios at a price of $140, which is like buying Avios for 1.27 cents each. I think that’s a great deal if you have a small-to-medium Avios balance and can use Avios for their high-value uses. Check and check for me!

So now we’re down to three options:

  1. $602
  2. 17,500 American Airlines miles + $96
  3. 6,500 Avios + $166

Valuing the Avios Award

As noted, I don’t even have 6,500 Avios. I’d need to transfer 6,000 Ultimate Rewards to my Avios account to ticket the Avios option. I value 6,000 Ultimate Rewards at $120 (2 cents each). I value the other 500 Avios that I’d be using from my account at $8.50 (1.7 cents each). Add up the value of the points plus the cash component, and the Avios award “costs” $294 worth of my cash and points.

Now the three options are:

  1. Avios award: $294
  2. $602
  3. 17,500 American Airlines miles + $96

Valuing the American Airlines Award

I have a few hundred thousand American Airlines miles. Lately there have been huge bonuses on American Airlines credit cards like the current 50,000 bonus miles after spending $3,000 in the first 3 months on the Citi® / AAdvantage® Platinum Select® MasterCard®.

I expect to get good value from my relatively large balance because I plan to use the miles for ultra-luxury travel on partners like Etihad, Qatar, Qantas, and Cathay Pacific, so I still am hoarding my stash and valuing them at 1.77 cents. If I had a million American Airlines miles, I think that valuation would be too high.

At 1.77 cents each, the 17,500 miles are worth $310, bringing the total “cost” of the American Airlines award to $405. That’s $75 close-in ticketing fee doesn’t help, but even without it, the Cash & Avios award is a better deal.

Updated rankings:

  1. Avios award: $294
  2. American Airlines award: $405
  3. $602

By the way, another way I attacked this problem was to look at how low I’d have to value my American Airlines miles before using them became the better deal. The answer is that at 1.14 cents per AA miles, I’d be better off using 17,500 of them + $95 in taxes and fees than booking an Avios award that I think “costs” $294. I certainly value my AA miles way above 1.14 cents each, so there is no way that the AA award is a better deal than the Avios award for me.

Bottom Line

I am not paying $602 for a ticket to Colombia, though I would if frequent flyer miles didn’t exist.

Instead, I plan to transfer 6,000 Ultimate Rewards to my British Airways Avios account. Then I’ll ticket those same flights for 6,500 Avios + $165.60.

That’s about a 75% reduction in the cash outlay for just a few thousand points. In fact, I’m getting about 7 cents in value per Avios on this award.

Did I get the math right? Are you still awake after reading this post?


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