Monday, December 24, 2012

Diversification Pays Off in the Miles Game

If you're even a semi-serious frequent flyer mile collector, odds are you'll eventually end up with balances in a variety of different programs. Some might think of that as a headache to have to manage, but diversification is actually the best way to get the most of your miles because each program has its own strengths and weaknesses.

At the moment, I have healthy balances in United's MileagePlus, American's AAdvantage, British Airway's Avios, US Airways' Dividend Miles, and Delta's SkyMiles. While the "earning" side and the "burning" side of miles are related, they are separate considerations. There's a lot of complexity in each of these programs, but in general, here's how I decide which program to use at any given time:

United is my primary program, as it is the one I fly most often and the only one on which I have status. That status provides a lot of flexibility when it comes to using miles to book flights - no fees for redeposits or changes, and some extra availability for award tickets in premium cabins. That flexibility makes them more valuable than they otherwise would be, and so I actually try to AVOID using United miles whenever possible. It's both a blessing and a curse that United always seems to have the best availability for the trips I'm looking to take. On the other hand, when I'm not sure about specific dates or other details, United miles are a great option for speculatively booking - because I can easily change or cancel later. Lastly, United's membership in Star Alliance offers good coverage and availability just about everywhere in the world, and with no hefty fuel surcharges, there really aren't any limiting geographic factors. Star Alliance partners include Lufthansa, Thai, South African Airways, Air Canada, and Singapore (to name just a few of the 27 Star Alliance partners as of this writing)

In summary: I look to United for just about any kind of trip, especially if I'm not sure about the details. However I'll generally try to use miles from other programs when I can, allowing me to save my United miles for those times when I really need to take advantage of that flexibility.

As a member of a different alliance (oneworld), American is a great diversifier to United - offering the ability to redeem on a different set of partners like Cathay Pacific, LAN, British Airways, and Qantas (to name just a few of the 11 oneworld partners as of this writing). Coverage and availability on oneworld to South America is quite good (on LAN, or even American itself), and that's the primary region I eye for my American redemptions. In addition, American has "off-peak" rates on most routes, and so can present a great value for booking trips in coach to Hawaii (only 35k miles, with availability that includes partner Hawaiian Airlines), and South America / Europe (only 40k miles), among others.

In summary: I primarily look to American for trips to South America, off-peak dates to Hawaii, or where their partner coverage yields better availability / routing. If I'm trying to book a trip for which both American and United have availability (and similar pricing), I'll generally opt to use American miles in order to save my United miles.

British Airways (BA) is also a oneworld member, and so has access to many of the same partners as American (each has a slightly different list of non-Alliance partners). The big differences for me are: 1) BA's program is distance-based, so longer flights require more points (unlike most programs which calculate the points required based on regions), 2) BA's program is segment-based, so points are calculated for each individual flight (vs. just the start point to end point), 3) BA charges heinous fuel surcharges on mileage redemptions for most long-haul / overseas flights. What this means in practice is that BA is an ideal compliment to "traditional" programs - as it excels where they are the weakest. For example, domestic flights on most US carriers require 20k-25k miles, depending on the distance. Domestic flights booked using BA miles (which can be used on American and Alaska) can be as few as 9k miles, depending on the distance! Living in New York and having family in Toronto provides a great opportunity to use BA miles on what can often be a frustratingly expensive route. In addition, BA's segment-based pricing can actually mean that it sometimes requires fewer miles to include a stopover in your itinerary than it does to book a direct flight! This is usually NOT the case, but Travel is Free does a great job of laying out some scenarios.

In summary: I primarily look to BA miles for short trips on American, such as New York to Toronto (or potentially New York to the Caribbean) - trips that I would never considering using miles from any of the "traditional" programs

Like United, US Airways is a member of the Star Alliance, so they have basically the same partner award availability. That said, US Airways' website sucks, so many bookings require a phone call (if you know me, you know how much I hate having to do anything over the phone). In addition, they only allow round-trip bookings (unlike United which allows one-ways), which presents another limitation. Despite these limitations, there are some cases where US Airways' program is preferable to United's. For example, though they have the same access to partners, US Airways requires fewer miles for a few routes. US to "North Asia" (China, Japan, Hong Kong, South Korea, among others) requires 90k / 120k miles in business class / first class on US Airways vs. 120k / 140k miles on United. In addition, US Airways offers "off-peak" redemptions to Europe and South America for only 35k / 60k miles in coach / business class (though the date ranges are much narrower than American's and must be on US Airways flights). In addition, as a US Airways credit card holder, I get a 5k discount on any award trips booked on US Airways flights.

In summary: I look to US Airways over United for Star Alliance trips where I'm reasonably sure about the round-trip details, and/or where the number of miles required for the trip are less due to the award chart or off-peak status.

Last (and maybe least) is Delta. Delta's miles are notorious for how difficult they can be to redeem, at least at the lowest (/sane) level. That said, Delta is the only US carrier that is a member of the third major alliance, SkyTeam - so I look to it as a diversifier that provides access to such carriers as Air France, KLM, and Korean Air (to name just a few of the 18 SkyTeam partners as of this writing).  Delta also partners with Virgin Australia, and a number of other non-SkyTeam partners. Unlike each other programs listed above, they explicitly do not allow redemptions on international first class tickets which is disappointing. I admittedly have never redeemed Delta miles, but I've heard that the availability on partners is actually quite good to Europe, Australia, and the South Pacific (all places I would like to visit).

In summary: I don't have any particular type of flight I target for Delta in particular - but if I can find a trip that bookable with Delta miles, I generally will over any of the other airlines mentioned above (except possibly US Airways).

One other thing I'll mention is that each of these programs have many more nuances and intricacies that can be leveraged to extract maximum value out of your miles. One of my new favorites is working the stopover / open-jaw rules to add on a one-way trip for free! In some cases, you can actually save miles by adding on an extra one-way trip! MileValue has a great series on free oneways that is very much worth checking out.

Lastly, it can be a bit overwhelming to try to keep track of a whole bunch of programs at the same time - especially if you do it for multiple people. I currently track balances and expiration dates for ~60 accounts, and there's no way I could possibly manage that without AwardWallet.

While American, Delta, and United have all recently blocked access, I still find AwardWallet to be an invaluable resource for all the other airline, hotel, car rental, credit card point, etc. accounts. The basic version is free, and you can sign up here (disclosure: this is my referral link, so if you sign-up I do get a small credit toward renewing my AwardWallet Plus). I use the paid version, AwardWalletPlus, as it provides unlimited account expiration tracking (among other benefits). It's a pay-what-you-want model, but the suggested amount is $5 for 6mos.

What are your strategies and approaches to redeeming frequent flyer miles?

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