Triangle Trip

Before booking an international ticket on United, I went through the Coach’s “Checklist for buying an international ticket.” In addition to the checklist, I went to UAL’s upgrade award chart and noticed UAL will be charging its customers a co-pay to use their airline miles to upgrade beginning July 1, 2009. Here’s the PDF and link for more details on how your miles are worth less and less in this economy. This is why I have been advocating to everyone to bank hotel points vs airline miles.

Under the new co-pay using miles to upgrade system, United will charge you $50 plus 15,000 for a one-way domestic (North America excluding Hawaii) upgrade unless you have a full fare economy ticket (which is class Y or B). The cost of the class Y or B ticket is nearly double. Your best bang for the buck on using miles to upgrade is for international tickets. The new co-pay system will have you paying $250 to $300 plus 25,000 miles each way for an international upgrade. Also keep in mind that the class of the international ticket must be class M or H or B — near full fare economy class.

The cost differential between a discounted economy ticket and a near full fare ticket is nearly double (see picture below):

The cost to buy a round trip international ticket is: $2,193.20 when it is “Upgrade Eligible” compared to $1,324.20 for a discounted and un-upgradable international ticket. As of today, I would have to use 60,000 airline miles plus $2,193.20 to get a round trip business class ticket on UAL from North America (San Francisco) to South Asia (Hong Kong).

Beginning July 1, 2009, I would probably have to pay an additional $500 co-pay charge plus 50,000 for the same international round trip ticket. The Upgrade Award chart was not really clear on the exact co-pay charge but it did say it would cost me 50,000 miles for a round trip upgrade from North America to South Asia.

For the record, a Business Class international ticket for the exactly time and dates was $2,985.20. The total price of $2,193.20 + $500 and 50,000 miles is not much cheaper (if not more expensive since you need to earn your miles) than the regular $2,985.20 Business Class ticket. With the business class ticket, you probably can earn more bonus points on UAL.

In summary, I strongly urge everyone to use their airline miles upon accrual. Just like the US dollar, inflation is inevitable. Today’s miles won’t go as far tomorrow.

AA has finally adopted Alaska Airlines‘ one-way reward model.  Passengers are no longer required to book a full roundtrip reward, but can segment out legs of the trip.  Think about the opportunities that you have missed in the past:

1.  While booking your reward ticket, you see that one leg of the trip requires an AAnytime  (50k) ticket, while the other leg only requires a MileSAAver (25k) ticket.  Instead of paying 50k, you now only pay 37.5k!

2.  While booking a normal ticket and comparing prices, you see that one leg of the journey was 3x as expensive as the other, but it still didn’t make economical sense to use your points on this one.

3.  You decide to extend your stay on a trip, but it’s prohibitively expensive to change your return ticket

4.  You’re running from the law and you’re not coming back stateside

No, this doesn’t excuse poor service and whatever other faults American Air may have, but it’s a great reach out to its core customer base.

American Airlines new Flex Rewards webpage

Video announcement by the President of the AAdvantage Program

-Terminal D

Following up to my previous post regarding depreciation of airline mile, I am sure you have seen tons of posts about which is the best credit card to earn airline miles or hotel points or getting cash back. Since 2006, airlines have adjusted blackout dates, limited the number of seats available for redemption and increased the number of miles required for a free ticket. Furthermore, most airlines are charging customers for ticket redemption. For example, I had to pay $150 plus 60,000 miles to redeem a ticket on Delta with less than a week advance booking. If you use the old method of one penny (USD 0.01 per mile), my ticket cost me $750 ($150 + $600). In addition, I had to pay for taxes and fuel surcharge. Despite the fact that my ticket was a last minute purchase and would have been around the same price, I don’t think airline miles are as valuable compared to hotel point.

Hotels unlike airlines have relaxed their redemption policies. Many hotels have adjusted their redemption requirements for 2009. Starwood never had blackout dates which makes them one of the best hotel programs. Marriott recently jumped on the same bandwagon by eliminating blackout dates. Since January 2009, hotels have been on a promotion spree and issuing bonus points to loyal customers. Starwood and Hyatt properties have multiple generous bonus offers that goes on to mid-April. Hotels also have generous cancellation policies. Here are the promotions:  Hyatt and Starwood. Most hotels allow you to book a room and cancel on the same day before 6PM without any penalties. Airlines however charges you a fee to redeposit miles.

If you are a frequent travel to international destinations like myself, hotel points will come in very handy. Most American hotels in international destinations are clean compared to local hotel chains – i.e., Thistle in the UK can be great if it’s new or a hole in the wall if it’s in an old building. American hotels are also consistent with service and generally cost more. Redeeming hotel points at international destinations gives you the best bang for the buck. You can always find a cheap fare to London (i.e., American and United has $200 round trip fares almost every week) but you will rarely find a hotel deal at a Marriott or Hyatt in central London.

In summary, we recommend banking hotel points which is going up in value vs. banking airline miles that is facing inflation pressure. The more airline miles you have with an airline, the more money you will end up spending on them.