I was talking with Yana about Virgin Atlantic’s amazing ANA awards — seriously, roundtrip in one of the world’s better first class products for 110,000 miles between the US and Tokyo — and I was outlining all of the hoops you have to jump through.
- Virgin Atlantic partner awards on ANA are roundtrip only
- You can’t book online
- Virgin Atlantic call center agents act as though they’ve never searched for a partner award before
- Sometimes they just tell you nothing is available without looking, or because they didn’t look correctly
- They do add fuel surcharges to awards (though Japan and North Asia on ANA those are nearly nonexistent)
You definitely want to confirm that an agent sees availability before you transfer points, but Virgin Atlantic’s miles are super easy to get since Chase, American Express, and Citibank all offer transfers to Virgin Atlantic. And if you’re willing to jump through those hoops, you get amazing awards at about half what United charges for the same thing.
Virgin Atlantic has the worst miles… except when they don’t.
Yana’s response to that whole discussion was perfect and just 5 words: the Law of One Price.
Essentially the concept says that arbitrage eliminates price disparities such that a good sells for the same price in all markets.
There are (legal) barriers to this happening, it doesn’t apply to non-tradable goods, or where market imperfections such as lack of good information persist.
But in frequent flyer program redemptions what this means is you pay in points and ease of booking or you save points and make up the difference investing in understanding rules and paying with your time to hang up, call back and in your patience.
You can find plenty of deals out in the world, but you pay for them with unfront learning investments and ongoing search costs.
And the best deals — as the law of one price suggests — don’t last. The frequent flyer hobby is all about arbitrage opportunities. And those are profitable until you arbitrage away all the excess profit. The best deals don’t last.
Some last longer than others, because Virgin Atlantic’s miles are viewed as not especially useful, because of their fuel surcharges, and because of the frustrations booking partner awards most people just ignore them. That helps, and perhaps explains that while I wrote about these ANA first class awards three years ago (and they weren’t new then) they’ve persisted.