Whose Miles are the Most Valuable?

Frugal Travel Guy outlines how he values the mileage in the various airline programs in which he participates.

He’s dead-on that British Midland”s points are worth the most:

  • Cash and points awards stretch the value of miles.
  • Reasonable premiums for premium class awards. Business class is 50% more expensive than coach, first class is double.
  • One-way awards at only half the price of roundtrip provide for amazing flexibility.
  • Star Alliance membership means that the above features are leveraged across an amazing network of carriers, and unlike United they don’t filter out otherwise-available award seats.

And the program is rewarding for it’s elites as well, with low qualification thresholds for top tier (Gold), heavy bonuses for paid premium class fares (a Gold who has already requalified earns 625% on paid first class fares!), and top tier elites even receive complimentary premium economy seating when redeeming for coach flights on bmi metal.

But he’s terribly mistaken in valuing US Airways miles lower than the rest — lower even than Delta Skymiles nad Northwest Worldperks.

US Airways is a pain on many, many levels. I don’t like actually flying them when there are reasonable alternatives. And I would not put my flight miles into the US Airways Dividend Miles program and earn elite status with the carrier. They no longer provide elite status bonuses on flights, and they don’t award 500 miles minimum per segment any longer (and US Airways has a whole bonus of flights under 500 miles in the Northeast!). Instead, I credit flights under 500 miles to British Midland (as I do with United flights under 500 miles, since they’ve also abolished the minimum earning per segment, and British Midland awards 600 miles minimum in coach and still offers elite bonuses).

But the question is what are miles worth, not whose program should you credit flight miles to. Of course I’ll take elite bonuses on another carrier, and elite benefits from another carrier, whenever possible. And for non-flight miles, one should certainly at least consider American because as Frugal Travel Guy points out mileage earned from all sources currently counts towards lifetime elite status.

But I’d rather credit non-flight miles to US Airways than to United, and certainly credit such miles to US Airways before Continental, Northwest or Delta. US Airways is in the Star Alliance, and their miles can take you first class on Singapore, Thai, ANA, Asiana, Swiss, and Lufthansa. And whereas United uses its technology to prevent its frequent flyer members booking award seats on its partner carriers — filtering out seats that its partners are offering for redemption — US Airways has no such technology. So it’s easier to redeem Star Alliance seats using US Airways miles than it is using United miles. Plus, their award chart is competitive although in some cases a bit more expensive, for instance North America to most of Asia costs 120,000 miles in first class using Dividend Miles, just as using United Mileage Plus miles … although US Airways bills far South Asia at its higher India rates. So I’d book Washington, DC to Hong Kong using Dividend Miles, but not to Kuala Lumpur.

Sure, US Airways redemption fees are annoying. But they’re a pittance compared to the value offered by Star Alliance premium class redemptions.

Note, though, that all of the advice in Frugal Travel Guy’s post and this one is entirely contingent.

  • American may stop crediting mileage from all sources towards lifetime elite status. This is a change which has been rumored for a long time, I just hope it doesn’t happen before I hit 2 million lifetime in my AAdvantage account.
  • British Midland could well be taken over by Lufthansa, and its points folded into the much less generoud Miles & More program.
  • US Airways could even leave Star Alliance, now that Continental is entering. Or they could figure out how to save money the same way United has, by denying its members otherwise-available award seats on partners.
  • Meanwhile, Delta and Northwest and Continental have all announced serious gutting of their programs over the past couple of years (and Delta this year especially). How much lower could Delta (and a combined Delta-Northwest) possibly go? All bets are off based on future changes which could occur in the programs like American, United, and US Airways which continue to offer real value.

Personally, I accrue in United, American, US Airways… British Midland when I can (great for Hilton double dips, Hertz rentals, and Star Alliance segments under 500 miles as well as any other segments I won’t need to requalify for status). Unfortunately British Midland points are just difficult for someone based in North America to earn, without a US-based credit card partner.

I also remain a fan of Starwood Preferred Guest and American Express Membership Rewards. On a 1:1 basis I’ll accrus in the former and then the latter program before I’ll accrue in United or American. And there are several international programs which offer real value, for all the trashing it gets the Air Canada program has a non-insane award chart for Star Alliance redemptions, and All Nippon Airways has some value in its distance based chart. Cathay Pacifiic AsiaMiles can be worthwhile as well, even after last year’s increase in mileage prices. And Alaska Airlines has just a ton of partnerships, incorporating much of the best of both oneworld and Skyteam.

The general principles I use are such:

  • Accrue first where the earning bonus is the greatest. I’ll take 8 Continental miles per dollar from shopping before I’ll take 3 United miles per dollar, Continental may be difficult in redemption but double mileage earning means I come out at least even if I have to spend double miles on redemption. And I’ll take 5 Thank You Network Points before I’ll take 3 United miles, but Thank You points are the subject of a different post…
  • Accrue second in British Midland, and hope the current value proposition remains in place until I can redeem the miles (don’t save these points, accrue them and use them, but that advice holds for all programs more or less). This is jsut such a hidden gem of a program, so unless I get a huge value out of another program (need the miles for elite status, for instance) I want to earn bmi points.
  • Accrue third where the flexibility is the greatest (the ability to transfer points into a variety of programs). Starwood, American Express Membership Rewards, and Diners Club fit the bill (in that order).
  • Accrue fourth where the value of redemption is the greatest, the partners take you where you want to go, and availability is good. That’s why I prefer US Airways over Delta, Continental, and Northwest.

How do you value your miles, am I missing something in my evaluation, how should the above framework be adjusted?  Appreciate your thoughts in the comments.

Update August 19: Typo and brain freeze corrected, thanks to the first two commenters 🙂

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. “And I would put my flight miles into the US Airways Dividend Miles program….”

    I think there’s a “not” missing from this sentence.

  2. You mentioned a very interesting observation “And I’ll take 5 Thank You Network Points before I’ll take 3 United miles, but Thank You points are the subject of a different post…” Since thank You Network Points are my main focus these days, lets hope to hear from you soon on this subject.

  3. Valuation depends on what the prize is. For example, I can redeem 60,000 miles for a World Business Class ticket between Honolulu and Japan. That’s a ticket value over $5000, meaning I’m getting nearly 0.08 cents per mile in value. So while you may knock NW for its poor redemption values (something that I haven’t found in terms of WBC availability to/from Japan from Hawaii), it’s different strokes for different folks, based on what the goal is, IMHO.

  4. You only mention “status” between the lines, but I find it such a strong motivator that I would put it as an item on its own. Elite status often trumps everything else by offering reduced or waived fees, expanded award availability, free upgrades, etc. AA’s eVIPs, for example, are literally worth tens of thousands of dollars, depending on how you use them! In other words, the value of your miles depend on the status level that goes with them and where you put your miles should be where you get the best elite status. By the way, great tips about BMI — I’ve been overlooking them like most other people!

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