Value Your Miles as Money

… or why international first class is worth it, domestic coach usually is not.

There’s been a bit of a blogosphere debate running over the best use of miles, and I wasn’t going to chime in. But since Rick called international first class his worst use of miles, and since it appears that my comments to the post didn’t get approved, I thought it worthwhile sharing my thinking.

Here’s Rick’s take:

International First Class redemption is a waste of miles, in my mind. I am being held captive in an aluminum tube for eight to 14 hours and just want to get to my destination after sleeping as much as possible… I don’t know or care about meeting “Dom” or any of his fancy drinking buddies. Caviar taste like too fishy to me and the meal, no matter how you cut it, is still going to be just airline food.

Turning the ultimate left at the nose of the plane may make some people feel important, but the attendants certainly don’t think you are. They know you just spent a few extra miles, is all. An arrival airport first class lounge is a waste of time to me. I’m going to my hotel and get a shower. If I smell like I’ve been on a plane all night, yep, I have.

Business class international is good enough for me. With the new lay-flat seats, I need nothing more and just don’t see the sense in the extra miles expenditure to go first class.

Our last trip to China involved a redemption of 55K frequent flier miles for business over and 67.5K miles for first class on the return, as that was all that was available. That is the second time I booked a segment of international first class. The first time I did it was Sydney to Los Angeles and I did not see the added value. When we decided to come home early from China, we were thrilled that they found us seats back in business class.

Let’s unpack this. Rick, I have a great deal of respect for you and what you do on your blog, helping to introduce especially folks new to this hobby and help them see how they can accumulate lots of miles quickly and use them to see the world. That’s great. But here I have to object.

  1. You say that your last trip to China was the second time you redeemed for international first class, and in the end you changed flights and flew business. So you’ve flown international first class once. Hardly a reasonable data set, I think, from which to base such a sweeping conclusion.

  2. The flight you decided not to take in international first class was, if I remember correctly, on American Airlines. I’d argue that American’s first class is really just a business class product with a fancy name. There’s certainly no Dom or caviar, and no, those flight attendants don’t treat you as well as flight attendants do on Asian carriers. But their business class seats aren’t flat beds, either, which is what you say you need…

  3. An arrivals lounge is something many airlines offer in business class. But a nice lounge on arrival is valuable to me, precisely because I may not be going straight to my hotel, only Intercontinental Royal Ambassador members are guaranteed 8am check-in. Besides, after my 15 hour flight last week I still had another connection. A nice shower in the airport is really valuable. How valuable? It only needs to be a little valuable to tip the scales in the argument here.

  4. I do enjoy Dom Perignon. I think it’s great. But it doesn’t determine my choice of airline. I flew Cathay Pacific first class last week, they don’t serve Dom, and frankly I don’t enjoy Krug as much. But that’s all really very much beside the point. Because there are certainly nice ‘extras’ in international first class, such as branded amenity kits and pajamas (though relaxing in comfort on a 15 hour flight is really nice…).

  5. The difference is first and foremost the seat. Cathay Pacific’s seat is wide enough that my wife can come sit next to me. It’s not a true suite with doors, but it’s the most comfortable seat I’ve ever slept in (sorry, Ben, I’ve not flown Qantas’ A380, I’ve only been in first class on their 747). It’s a peaceful, spacious cabin. I have a mattress pad, duvet, overstuffed pillow. And I do change into my pajamas. Sure, I have some good enough food, still airline food perhaps (though try the Japanese meals on All Nippon and see what you think!), but it’s a step up and part of feeling rested and relaxed on arrival. Along with flight attendants who do address you by name, learn your preferences, and try to tailor service to them.

Do I need that to survive? Certainly not. Is business class ‘good enough’? Certainly it is.

But the point of this hobby, to me, is making the travel part of the trip — not just the getting there. And making the trip itself as relaxing as possible, with as little recovery time as possible.

In my whole life I would never afford to be able to travel the way that these miles and points have allowed me to, and for that I’m exceedingly grateful. But isn’t it wasteful to splurge for first class when business class is just fine?

  • It isn’t that many more miles at least much of the time. United charges 10,000 extra miles each way from the US to Asia. American charges 12,500 more each way. Let’s value that as money, taking Rick’s estimation of 2 cents a mile I do actually value the upgrade — 15+ hours JFK to Hong Kong — as being worth $250. Absolutely, in a heartbeat. And that’s just for the seat. With United miles, when I get an hour-long Thai massage in the Bangkok airport, escorted to the plane at the appropriate time, pajamas and Dom Perignon, a shower in the First Class Terminal in Frankfurt and then driven across the tarmac in a Mercedes to the aircraft all for incremental points ‘worth’ $200, then abso-flippin-lutely.

  • It’s often easier to get first class than business. Rick discovered this, he couldn’t find business class one-way on his flight to China so he selected first class for an incremental 12,500 miles. First class gives more options for award space, and without spending double miles, it’s a great value.

I’m not saying that everyone should redeem their miles this way but it strikes me as silly to mock international first class redemptions by saying business class is ‘good enough’ when the prime criteria is sleep and Air France, Lufthansa, American, etc. don’t even offer flat beds in business.

And it’s silly because when you’re able to generate large amounts of miles by paying a little bit of attention, the cost increment really shrinks. For instance, your cost per mile should be less than that 2 cents and you can earn plenty of miles at prices that low, airlines often sell miles for less. So you don’t have to have purchased millions of miles from US Airways during their holiday shopping promo Christmas 2009 at 7/10ths of a penny apiece in order for the numbers to work.

But it is important to determine the price point at which something is worthwhile to you. Because your miles are money.

And that’s my issue with most domestic coach redemptions. I won’t make (4) $250 domestic coach redemptions to Florida at 25,000 miles apiece. Instead I’ll spend the $1000, save the 100,000 miles, and use it to fly business class to Europe. I’ve then purchased a business class ticket for $1000, what coach to Europe often costs nowadays.

And yes I do fly business class to Europe, a short hop across the pond from the East Coast I’m perfectly comfortable in that cabin. But for me the drivers are how many extra miles? What seats are available? And which products would I be flying? Since if I can save miles and fly a flat bed business seat over, say, United’s or American’s first class and the flight is relatively short I will.

There are times when an intra-North American award makes sense. If I lived in an American Airlines hub city and could grab short hop last minute tickets to non-stop destinations using Avios points, and the cost of purchasing those tickets was sufficiently high, I might well do so. But that’s because I Was getting enough value per point to make it worthwhile, and because the value of those points for higher end redemptions was reduced, in other words the opportunity cost of using miles in that program and in that way has fallen.

Every time you use miles, there’s an opportunity cost. Just like with cash, you might be able to buy the nice car but can’t take the nice vacation, or can send your kid to private school but not day camp. So you need to use your miles for the thing that’s most valuable. Of course that means there’s subjective value involved, if you do not value the bigger seat and more private cabin of international first class at all then you will not want to spend more miles to get it. But it’s worth realizing that it isn’t a whole lot more miles, so you don’t need to value international first class a whole lot more to make it worthwhile.

Ultimately, I agree with Lucky when he says

Do I need a flight attendant that’s taking care of just me? No. Do I need a six course meal? No. Do I need a brand name duvet and comforter when flying? No. Do I need a bed at 37,000 feet that’s as comfortable as my bed at home? No. But if I can do it for a mild premium, why the heck not?

Of course, you may not value international travel at all. Mommy Points is making domestic trips her family couldn’t otherwise afford. And I think that’s great. She doesn’t have a higher value use for her miles, so should use them in a way that she finds most valuable.

Still, there’s a meaningful tradeoff between points and cash. Sign up for all of the credit card bonuses you’d like, but in terms of spending money on a credit card it probably makes more sense to get a good 2% cash back card rather than a mileage card. You’ll then use the cash for airline tickets and won’t have to worry about capacity controls at all.

Do you agree? Is international first class worth a modest mileage premium as part of securing aspirational travel? Or is it entirely superfluous, the miles are better spent on something else like a domestic coach flight from Houstom to Dallas or an LCD toaster?

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 Milepoint.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. I will be better to answer next year as I’m taking Cathay First Class and BA First Class on long flights with connections.

    I can comment on showers however. Not only do I appreciate showers when I have a connection, but my fellow travelers do as well!

    In general, when someone tells me they don’t have use for showers, I try and limit my exposure to them.

  2. Rick mentions that he accumulates miles at under .2 cents, making 12,500 miles=$25 (as Ben correctly pointed out).

    If you were at check-in and were offered an upgrade to F for $25, who wouldn’t take it.

    BTW, QF F on the A380 is great!

  3. Yes the relatively small amount miles required to bump up into First from Business is very much worth it to me. No, it’s not necessary, but highly enjoyable.

    Last year marked the first time I had to buy a last minute, out-of-pocket domestic ticket for which the price was well beyond my tolerance. I ended up burning 50k miles for a United Standard award and I have absolutely no regrets.

    So… I go both ways, but 99% of the time to the former

  4. Gary, I won’t know until next year. But because of your advice, I popped a whopping 50,000 points per ticket to upgrade from J to F on CX, and quite possibly one of the most expensive J->F upgrades out there. I did it with a combination of BA, MR, and UR points, ticketing with BA.

    The sucky thing is that we fly JFK-HKG with a stop over to DPS, so we don’t get to use the F lounge on the way and, and HKG-DPS being what it is, only get the J lounge on the departure 🙁

    One of the neat things with CX F is that it appears much more couples friendly than J (which we did last year and found quite satisfactory) and my wife and I would like that.

    All in all, I’m looking forward to this as it might be a once or twice in a lifetime experience. (I have 300k miles stashed with AA, too. Might do a mix of CX F and EY F on a trip in and out of MLE and India.)

  5. I prefer spending miles on F tickets, if only b/c I could not afford to spend $ for F tickets. As a UA 1K member, I could at least buy Y, and then upgrade to C using SWUs. But for the experience, for the wow factor, F is totally worth it.

    My gf compares everything to our LAX-ICN segment in OZ F in 2010. Basically a private cabin, with decent Korean food and top notch service…I don’t think there’s been a better use of 120K US miles. All the other UA C segments blend together in our minds, but we’ll always remember our Asiana flight in F. Isn’t that the point of a vacation?

  6. The answer is “it depends”. While I agree with many of the points you make, I still think that taking the frugal approach might make sense in a lot of circumstances. If the bumping from business to first class will cost me the mileage for a free coach trip to Europe, I’ll take the Business class trip. Then I would have enough miles to travel for free in coach ($1,000+) … so yes, in reality, your bump to First Class may have cost you $250, and that may be very much worth it, but you’ve incurred an opportunity cost for another flight later (coach to Europe). I don’t think there’s a formula answer. Every circumcstance is different and you’d have to analyze what you’re prepared to spend and what’s it worth to you.

  7. I think it depends on whether you consider mileage to be abundant or not. The relative cost increase of F over J is insignificant when you can easily earn 2-300,000 miles annually at low cost.

  8. I think the majority of people using miles for domestic flights are families who could not afford to pay cash for those domestic flights. Their miles are accumulated through sign-up bonuses. No cost for the miles except the five minutes to fill out an application and make a few Amazon payment transfers to meet the minimum spend. If it allows them to take their kids to Disney World or some other vacation they could not otherwise afford, then I would say that is a wise use of miles for them.

    If a person can afford to pay cash for their domestic flights, then using miles for F class on international trips is a fun thing to do.

    The best use of your miles is whatever you think it is.

  9. There is one redemption that provides much more value per point than an international F ticket. Wait for it…

    … An International F ticket for your wife! Not only do you accrue major spousal credits, but you earn all the slack you’ll need to indulge your mile-earning obsession.

    That said, Rick has a point that J and F redemptions can be difficult to justify in dollar terms. However if you can amass enough points to cover all your self-paid travel, then burning the rest of them on an international F ticket seems like a great idea to me. The ticket is for your wife, of course. And don’t ask permission first; just give it to her.

  10. There is no right or wrong way of doing things as simple as that. Value or miles and points are always relative. What rate you accumulate miles, how much financially strong you are , what stage you are in life. There are so many factors that would dictate what choice you made.
    Preaching a way of life to others is simply childish.
    I always feel that topics/discussion like these are more like political agenda to show yourself as one of their own and gain more readership by striking an emotional cord with them. Playing the common man card is oldest trick.
    Why no body is shouting , Southwest offer still alive?? pgary, hit the nail on the head possibly why?
    Offer the options and let people decide what is best for them.

  11. I would rather have $1000 in my hand than 60000 Avios points (after all why would you use 100k when you could go from DC to FL for fewer SW or Avios points). Miles and points allows me to take trips that I would normally not be able to take. Yes, I set the bar low. I would say I value your blog at 1c/mile, I don’t feel the slightest need to travel in first class. In contrast, I feel more confident that I would not enjoy the type of attention and flight “experience” that you describe. Just give me a decent meal (unlike JAL), a good entertainment system and a comfortable seat. I prefer them not using my name and I would feel uncomfortable getting a ride to the airplane. Some of us prefer a decent and honest service, nothing special please. I prefer business over coach (especially for 7h+ trips). But, to 1st class I say no thanks, I don’t enjoy that “extra” service.

  12. One can argue against flying F instead of Y, but you can also claim you shouldn’t be traveling at all? Wouldn’t that money/time/etc be better spent elsewhere? When I take a trip, I WANT the best treatment I can get. I would rather take one great trip than three poor ones…

  13. Respect Rick, respect you. In this case, I agree with you. First Class is almost always worth the premium in miles to me. Haven’t done that many international redemptions, but I’m starting to get the hang of it…I think… And my focus is on First Class if it’s available.

  14. +1 Ben. Some one like Tom Stucker redeems his miles for gifts mostly, because he has miles coming out of the wazzo. Personally, I would use it for F if it’s available on my choice of carriers, such as NH, TG, CX, OZ, Or LH. But if it’s UA, the new C config is just as good, for me as there is not much different between C and F on UA.

  15. > and since it appears that my comments to the post didn’t get approved, I thought it worthwhile sharing my thinking.

    Nice to see you are part of the 99% of us who have had our comments ‘moderated’ by Rick! Happy to #OccupyViewFromTheWing in protest!

    As for MommyPoints: the irony here is that I’m betting (just betting) that she redeems sometimes under 1 cpm. Yet quite often gift cards can be redeemed for 1 cpm. Thus, 1 cpm should truly be the absolute floor for redeeming miles in those programs. Encouraging people to redeeem otherwise is just horrible advice.

    Now I can’t wait to see what TPG has to say about redeeming for international First. Oh wait, he’s a SkyPeso guy, so he doesn’t know what an international First cabin looks like! (Sorry Brian, couldn’t resist poking a little fun! We know you’re the best.)

  16. Gary. I posted every comment I got thank you. And the fancy car and massage table still don’t impress me. The 12500 mile difference between business and first equals a one way award, LAX to SAV I need in January. The cost of that ticket is $214. I’ll use the miles I saved by flying biz long haul instead of First. To each his own. I drive a Ford, not a Lexus or MB and it gets me from A to B just the same.

  17. @Dan I have used the CX F lounges when arriving in first, departing in business, no problem. Just show your F boarding pass stub first, they’ll let you in.

  18. This may sound like blasphemy, but I don’t mind Y. Seems to me, if you can get two trips to Europe for the price of one, you are coming out ahead. I have to say, I would rather ride on a cramped second class bus with the locals for twenty-four hours rather than take a two hour flight, because you not only get to experience the scenery, you also get to meet people you would never run into on a plane. To each his own and YMMV.

  19. Hi Gary,
    I definitely want to weigh in on this. Bottom line is that although I share your respect to Rick, I disagree with him as well. The two main reasons for me are the following. First, is availability – twice this year I was able to get first and not business. Once was BA – IAH/DXB for me and Mrs. Greekquent Flyer and the second was SFO/ATH via FRA on LH for Papa Greekquent Flyer. In both cases the incremental miles were not that much – and in the case of BA – it was really not much more since I was using the 2 fer Chase voucher. Second, and more important for me, is the value of the experience in cases where people other than you are flying. I still remember 12/26/99 when I flew F on UA with both of my parents from SFO to SYD (where I was living at the time). Seeing the look on Mom’s face as they scooped mounds of caviar onto her plate was worth the extra miles (which, again weren’t that much since it was one of the old UAL “couples awards”). In this era of rapidly devaluing miles (BA and AC being the most recent examples of this) my motto is definitely “Smoke ’em while ya got ’em!”

  20. These blog posts have grown sillier throughout the day.

    Everyone needs to start respecting the opinions of others. Period.

  21. Gary, I think your question (and Rick’s answer) is really about what kind of traveler you are. For you and Ben, first class is part of your aspirational travel. Given that you are generating lots of miles, it absolutely makes sense for you to redeem in first class for long haul flights.

    I suspect Rick generates fewer miles than you do, and the destination matters more to him than the getting there. While he wants to be more comfortable than coach, he doesn’t need the extra benefits on the margin that first class provides.

    And there are people like Mommy Points and myself, for whom domestic awards and even domestic hotel stays take precedence over all other mileage use, since taking even one international trip to Europe is an aspirational event.

    The whole issue just highlights that there is not just one way to enjoy the hobby. The way you value your miles will be highly dependent on your ability to generate new miles, your free cash flow (fuel surcharges suck), your proximity to hubs, your age, your marital status and whether you need rooms and seats for the kids. One blog is not going to tell you all that you need to know, which is why I read them all!

  22. yawn.

    ….fairly new to following a number of miles blogs, have been excited about the potential, have learned a lot from you as well as Daraius and a few others. In the grand scheme of things this seems like a “how many angels can dance on the head of a pin” conversation…or perhaps more pertinently, do I like blue or red? Ie, personal opinion, preference. One can’t even dictate a universally agreeable metric… raw $value/comfort/opportunity cost…”man is the measure of all things”, ie, to each their own. Some of your comments lead this way…others make me think there’s something to gain for you by stirring up the the 0.1% interested in such a debate.

  23. Give people more money,miles and see how many still sail in the business boat 🙂
    Heck Cattle will leave their grass because grass will be greener on the other side . 😛

  24. As others have said, this is a VERY relative subject. Say I build up 40k AAdvantage miles. I fly little and it takes time for me to get points, but 40k is just more than the recent Citi signup bonus, and I’ve already got a coach trip to Europe (off peak). But I’m still a bit off from a business class seat. Say I went for personal and business Citi cards and have 150k miles. I can either then take almost 4 trips just on the bonus miles or one in the other classes. Again, slow accumulation might make me cherish more trips rather than one big blowout.

    I’ve also used miles domestically to save significant money to get my family from coast to coast…saving the airfare made the rest of the trip a lot more enjoyable.

    Again, it’s all relative to your situation. Even though I probably won’t splurge for anything but a coach redemption I really do love reading about the jet-set and how to fly in style. I certainly grumble when stuck in coach…but once we get there I’m very content!

  25. I don’t think this really needs to deteriorate into some argument. My brother thinks I’m cheap. I’m okay with staying at the best Choice hotels, Holiday Inns, Best Westerns, etc. I’m not into spending 400 on dinner, either. But I am into getting to go to AS MANY PLACES as I can, to see as many wonderful things as I can and having as many wonderful experiences as I can. That’s why I don’t redeem for First Class. I’ll go on more trips than almost anyone. But I couldn’t afford (dollars, points and miles-wise) to do so if I always (or ever) redeemed for First Class, stayed in the most fancy hotels or bought the most expensive dinners. My brother might take two trips a year so I don’t dis him for wanting to go FC. But I’ll take 25-30 leisure trips a year. To do so, I must work the VALUE angle. It really does all come down to each person’s priorities.

  26. The travel experience is part of the trip for me as well, just like the hotel experience in suites and executive lounges. I could get less luxurious lodging or even rental apartments cheaper, but like first class, for me it is all part of the trip experience.

    Oh, and it was only an additional 15k in First for 4 long haul segments on CX to HKG/JNB using the Alaska award. It would have been a waste not to spend the extra miles for First Class on that trip.

  27. This is a great academic debate. But the reality is that even if you want to, you can’t get F over J because of lack of availability of F award seats in most cases. Case in point: for the last 2 years three of us have flown in F on AA miles from ORD to Europe via LHR for fabulous summer vacations. For summer of 2012, F award seats (3 at a time) have been non-existent on AA miles, so I have ‘settled” for J seats for now but will keep looking for F seats until the last minute. J award seats have been so so plentiful by comparison. For me, F is the way to go. That is why I collect the miles.

  28. I have always noticed that your operative word is “aspirational” while Rick’s is “frugal”. Maybe that explains the two personalities and mindsets.

    My own dreams are similar to yours, but real life choices closer to Rick’s! Heck, for many years, before I really understood how to accumulate miles, I preferred Economy because that meant one more visit to my family than in Business. Now, thanks to people like you, Rick, Ben, etc., I can afford Business.

    However, as you said yourself, miles are like money, and many of us just never manage to have enough of either. As a result I still try to be frugal, albeit J-frugal, 🙂 so my needs and wishes do not get that far ahead of balances and earnings.

  29. I’m another of those rare birds who reads these blogs, goes to the DO’s, and yet is happy flying international “Y” class. I’ll go for “J” or “F” awards if the incremental cost is small (for example, if saver awards are available in F or J and only standard awards are available in Y).

    That said, I was delighted with BA new F SFO-LHR last summer; felt it was well worth the extra miles (BA new F was a true aspirational experience; BA J was not lie-flat/looked like commodity service).

  30. Totally with you on this one Gary. I have redeemed miles for Southwest coach to Lufthansa first. Each one depends on the situation, but the experience per mile is so much greater in first.

  31. This whole debate is silly. “Objecting” to Rick’s view, or anyone’s view, of travel preference is sort of like objecting to their favorite color. It’s kind of funny how some admit to the fact that this whole debate is silly since it’s all a matter of personal preference but then proceed to try and “prove” why the other guy is off base.
    That being said, I’m with Rick on this one. My favorite travel color is Biz. It’s both frugal and aspirational in my book.
    And considering the length of this particular blog post by Gary, me thinks he doth protest too much. Rick wasn’t knocking you, he was just telling it like it is for him. You don’t need to justify your First Class propensity.

  32. He is just doing the rest of us a favor by discouraging the newbies from taking up those valuable F seats! Nothing wrong with that.

    These blogs should just promote Y class and keep this C and F redemption a secret for the rest of us.

  33. I say let the Spartans fly coach, not even Biz, whether it is a paid ticket or an award one. I will continue to fly in FC and keep savoring the few years of travel I can do before the limbs give out.

  34. I couldn’t have said it better, Gary! Yes, the trip is, for me, one of the very best parts of the entire travel experience……thanks to you!

  35. “In my whole life I would never afford to be able to travel the way that these miles and points have allowed me to, and for that I’m exceedingly grateful.”

    +1

  36. I think the big part of discussion missing is: how many trips will cash for domestic and points for international first class net? I rather have as many free (cash-wise) trips to me as possible than spend 15k-25k extra on first class international.
    And reading this little battle, it seems like too much effort is spent on debunking the other person’s point of view, not actually considering all the different flyers/needs.

  37. @Rick- I understand what you’re saying about saving 12,500 for a one way domestic, but flying business does not equate to a Ford…

  38. I would absolutely spend additional miles for international F if necessary because C inventory is n/a – in fact we did this a few months ago in order to secure seats using the BA mileage companion ticket from SFO-LHR-FCO.

    However the 25k to save $250 is not really an tough call (rick’s column notwithstanding) so let me post another one that we faced earlier this year:

    You have to attend a funeral on short notice on a holiday weekend. The lowest economy ticket is $1200. Use miles? What if you have to spend 50k to fly F?

    For me it was an easy call – I’d rather use 50k miles than spend $1200 of my own cash for a ticket that accumulates 5000 miles (not to mention having Mrs. B spend 5 hours in economy each way with a lap child). Of course, if you are traveling solo, get a 100% bonus, and can upgrade, the paid ticket is a little better…

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