Rule #1 of using miles and points: be pragmatic. Sometimes a redemption appears horrible on paper but still makes great sense.
I’m in Vienna, Austria for the weekend and the trip came about at the last possible moment. I was in Frankfurt and needed to travel the 386-mile journey on (ideally) a specific flight to meet up with my friend John.
Purchasing same-day tickets can be brutally expensive. The cheapest non-stop flight was 278EUR one-way (round-trip was about the same price, but not cheaper). The particular flight I wanted was 437EUR or about 472EUR r/t with the return I needed. I was a bit surprised at how much Austrian or Lufthansa can extract for last-minute tickets considering the route is often 99EUR r/t if purchased a week or more in advance.
Anyway, I tried everything–hidden city, throwaway returns, etc…but the price just did not budge much from the amount above.
So I thought, well I better just use miles.
Doing the Math: Points or Pay?
Aeroplan miles have no close-in booking fee, but do carry a fuel surcharge. The price would be 12,500 miles plus 124.90CAD in taxes/fees (91.50USD), of which 59.70CAD (44USD) was a fuel surcharge.
United would have been the same price without the 59.70CAD (44USD) fuel surcharge, but would have carried a 25USD close-in booking fee due to my Premier Gold status (50USD for Premier Silver, 75USD for non-elites). Since I have a bigger supply of Aeroplan miles and value the flexibility of leaving points in Chase Ultimate Rewards, I leaned toward booking with Aeroplan.
If I am being honest with myself, I value United and Aeroplan points equally at 1.5 cents each — I’m simply not willing to pay more for them. So let’s take the 258.51EUR ($284.30) price of the ticket and do some math.
The value of 12,500 miles at 1.5 cents is $187.50. Add the $91.50 in taxes/fees and we come to $279, almost equal to the cash price of $284.30. So it was a wash.
Even though I can normally extract far more value out of a points redemption when redeeming for premium cabins, I simply did not want to spend extra money this weekend.
So I booked with Aeroplan.
This was not a sexy redemption nor a particularly valuable one. In fact, it was the worst Aeroplan redemption I have ever made for myself. But it did make sense for me and that is the beauty of using your miles. Ultimately the only thing that matters is how much you value your miles. I performed my own cost/benefit analysis and determined that using miles made more sense than conserving them for another trip.
But how many miles would you have earned, had you paid cash for those tickets (including credit card rewards)?
Good question. Would have been about 1100 miles or $16.50 in value.
I’ve got a pet peeves here. A fuel surcharge means “world oil prices have increased beyond our planning, so here is a temporary fee to cover our costs.”
A carrier surcharge, which appears here, is “hey stupid customer, I know we promised you flights for free if you fly with us but screw you we are charging more”.
Why do AC and LH have carrier surcharge for AE redemptions but LX doesn’t?
Agree fully. It’s absolutely a scam.
Doesn’t Niki or whatever AB fly this route for 4500 Avios anymore? That would explain the high LH cartel pricing.
Last minute, you can also get the flights with M&M for 20k RT + E87 in charges.
I had planned on doing that, but apparently NIKKI doesn’t run this route anymore.
I would have done the same thing. (Technically I would have used UA miles to save on fees because I have lots on hand and also as a 1K I have the flexibility to make changes).
Speaking of the worst Aeroplan redemptions…there was the time when a co-worker told me he’d burned his 100K+ Aeroplan balance on a trip to South America. “Oh great, so you’re flying business class,” I said knowingly. Nope, he was flying economy.
Ouch, that is a painful redemption!
Thank you so much for sharing. Love your blog and appreciate your candor.
Once you are aware of the values of points and miles, despite all the self flagellation, I believe we call the balls and strikes as we see them at the moment, and we rarely have the benefit of instant replay.
Kinda like fishermen who can’t stop thinking about the one that got away.
Don’t know about you, but, I have been at this for literally 30 years. Hit a few home runs, struck out a bunch, and most of the time just happy to play the game, and get on base every now and then.
Thanks for commenting Ricardo!
Very much appreciate your blog and this analysis, I generally try to employ the strategy you endorsed: using miles for premium cabins. I, too, have begrudgingly used them for last minute coach tickets. In almost every case, however, the availability of a free ticket enabled me to take advantage of something that was well worth it and that I would have missed if I didn’t deviate. So, hopefully you had a great weekend with your friend–live large and savor it!
How do you find the Star Alliance members to be in terms of flight experience compared to Air Canada and United Airlines?
It depends. Instinctively I am prone to say “better” but that is unfair. I’ve had wonderful UA crews this year–
And questionable ones on Thai, Singapore, and Air China.
Great crews on EgyptAir and Turkish too.
I had a similar situation involving Iberia. Wanted to go to OVD from NCE for a weekend trip with a friend but cash prices were well over €500 due to my time constraints unless I wanted to fly Vueling with an overnight stay in BCN (not feasible for a 48h trip). So I begrudgingly turned to my miles & points piggy banks.
Discovered Iberia’s decent rates of Avios+Money (cos I didn’t have 10,000 Avios to spend). So I transferred 2,500 Avios from my BA account to Iberia and then redeemed them (plus €106 in co-payment) to go on a 1 stop evening flight via MAD. Then I got my return leg with a train to MAD then a budget flight on Iberia Express from MAD back to NCE.
€200 spent versus €600 without points.
May have seemed stupid to me at first to spend my hard earned points on such a short leg but if my math is right, I got about 4 cents per mile in value (ignoring the co-payment). Thanks for the awesome posts Matthew !