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It seems like I hear more and more from people beginning to doubt whether chasing airline Miles / Points is really worth the bother these days. With frequently cheap cash fares and loyalty programme devaluations, what’s the point of Points / Miles?
In this three part series I’ll be weighing up the arguments, before sharing some tips to ensure you can still make the most of your Points / Miles!
Another day, another incredible airline sale. This time it was BA/Iberia/AA – but if it’s not them it’s Etihad, or Finnair, or Qatar, Qatar, Qatar. There have been some excellent prices in both Economy and Premium cabins this year, and it’s beginning to feel a bit like the new normal.
Plunging oil prices have presumably played a part, as have competitive pressures from the growth of long-haul budget carriers like Wowair and Norwegian.
There also seems to have been a deliberate change in pricing strategy by some airlines in terms of a new willingness to heavily discount Business and First Class. I’m not sure if that’s a response to temporary overcapacity as the big Middle Eastern airlines continue their impressive growth, or a bigger shift in how airline executives are now viewing premium cabin inventory. I suspect a bit of both.
One noteworthy aspect of this shift is that it is happening at a time of relatively strong global economic growth – things might not be great, but we’re a long way from 2007/8. Whenever another recession does hit, could airlines really respond by discounting prices much more than they already do?
What I find particularly interesting though, is that these lower cash prices have coincided with substantial Miles / Points devaluations all over the place. In many cases, flyers now earn fewer Miles from their paid flying and need more Miles to redeem for award flights.
The obvious impact of these changes is that spending time, money and effort earning Points / Miles (and learning how to use them) begins to make less sense.
Let’s have a look at some concrete examples to show what I’m talking about:
British Airways now charge 60,000 Avios (Peak) + £300.00 for Economy award flights to Asia.
Qatar and Etihad regularly sell cash fares from the UK to Asia for ~£350.00, and you can pay even less with Norwegian if you’re prepared to start in Scandinavia.
Even setting aside the Miles and Tier Points you could earn from a paid flight, 60,000 Avios only save about £50.00, which values them at less than 0.1p each! I think we can all agree that a redemption like that looks a little sub-optimal…
To North America, things are even worse. Using Miles can, shockingly, regularly cost you more in hard cash than just buying a ticket!
Norwegian sell direct flights from London for under £250.00 Return and Wowair doesn’t charge much more (+ offer free stopovers in Iceland!).
BA charges taxes/surcharges of ~£300.00 on award tickets.
So, using Points / Miles for Economy redemptions these days can seem like a pretty terrible idea.
Is the situation better in Business / First Class?
Business Class fares in particular have never been so cheap (see BA/AA/Iberia ~ £690.00 to USA), and with many of the most popular airline loyalty programmes (BA, AA, United, Delta) you now need a lot more Miles / Points to fly in premium cabins than you used to.
The Avios devaluation last year hit Business and First Class redemptions during peak dates and on partner airlines very hard.
Return Business Class flights to the West Coast of the USA (during peak dates) now require 150,000 Avios + £527.00.
Flights to East Asia can be even more expensive – Business Class to Singapore now requires a staggering 210,000 Avios + £519.00.
When you get sales like the current BA/AA/Iberia one to the USA or sub-£1,000 Qatar fares to Asia, using Points / Miles instead seems mad – unless you can accumulate them for basically zero cost and very little effort.
Even if you can generate Points like that, you would likely get a better return redeeming them for hotel reservations or similar at ~0.5p each, than under 0.25p for flights!
Using Miles for First Class can work out a little better in terms of notional value, but only because the cash prices tend to be stratospheric and there are fewer big sales for First Class.
Whether First Class is sufficiently superior to Business Class to merit spending considerably more Miles or cash is a matter of opinion though. Personally, I’d be tempted to pick Qatar or Etihad Business Class on the A380, or pretty much any Singapore long-haul Business Class, over BA First if I had a straight choice.
So – collecting Miles is terrible these days, you really shouldn’t bother…
Or perhaps that’s being a little hasty?
Check out Part Two tomorrow for a very different point of view.