There’s a new way to spend your frequent-flier miles and, like most deals being offered by the airlines these days, it’s not a very good one.
The deal is this: you can use miles to pay for part of a ticket. (Delta and Northwest offer this option, with restrictions. Other airlines seem likely to follow.) So if a ticket costs $600 you could cut the price to $300 by throwing in 30,000 miles.
It’s tempting. Fares are going up and we could all use some help paying them. The trouble is with the exchange rate of 10,000 miles for $100 off the ticket price. It sucks.
That’s a rate of 1 cent per mile. And it’s not enough.
Consider the typical domestic air ticket. Under traditional award ticket programs, the airlines generally charge 25,000 miles to fly round-trip between any two points in the contiguous 48 states.
If you were willing to trade your miles at the rate of 1 cent per mile, you’d be willing to trade 25,000 miles to book a domestic ticket that was selling for $250. But most experts will tell you not to do that.
When you find a fare that low, you should pay for the ticket with dollars and collect miles on it. (When you pay for even part of your ticket with miles, you don’t earn any.) You shouldn’t let go of 25,000 miles for anything less than a $400 fare, an exchange rate of about 1.6 cents per mile.
I aim higher, more like the 2-cents-per-mile range. But I’m willing to put a lot of time and effort into securing the best deal I can find. I booked my most recent award trip 330 days before departure – as soon as the airlines rules allowed.
I know it’s convenient and easy to use miles under these new “pay with miles” plans. Booking tickets for award travel the old way is confusing and frustrating. But it’s a better deal, especially if you do it right.
If you want to know more about how to do it right, check out Gadling’s tips for frequent flyer miles. Believe me, after flying to Europe and Hawaii on frequent-flier miles, I can personally guarantee that this is worth learning.