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It’s make-or-break time. I’ve been running a series on the American Express BA Premium Plus credit card (BAPP) based on the premise that paying an annual fee and substantial surcharges in order to bring a companion along (notionally for “free”) is simply not always worth it, when one can obtain a cashback credit card and travel hack a similar reward at the same or lower cost. I haven’t always been as successful as I expected…
If you want some further background on the BAPP companion voucher, I suggest that you read Miles’ excellent post on the subject.
But with Alaska Airlines Mileage Plan having announced their latest promotion for selling miles at a discount, it’s time to test my theory for a destination regular readers should recognise as a reward chart sweet spot… Hong Kong.
Using the Companion Voucher for Reward Flights to Hong Kong in Business Class
How much would two reward flights from London to Hong Kong cost, thanks to the BAPP card and a companion voucher? You’re going to need a lot of Avios for even one person so, let’s assume that you spend £24,000 in a year to earn some Avios and a companion voucher.
Reward Flights from London to Hong Kong in Club World on a Peak Date
You will require an eye-watering 180,000 Avios for the “paid-for” return reward in Club World. Since you only earned a measly 36,000 Avios from spending a substantial £2k per month on your BAPP, you are left 144,000 Avios short of your goal!
You must also pay £560 per person in taxes and surcharges to fly in Club World on British Airways.
As a result, you will pay £195 (BAPP annual fee) plus £1,440 (to buy 144,000 Avios) plus £1,120 (2 sets of taxes and surcharges) = £2,755 for two return rewards in Club World to Hong Kong.
Travel Hacking Option A – Get a Cashback Credit Card and Buy Alaska Miles
Spending £24,000 annually on a cashback credit card is going to earn us a nice rebate. At 1% for the first £10,000 and 1.25% for higher amounts, we can earn £275, less the £25 annual fee, for a net return of £250.
Business Class rewards between Europe and Hong Kong on Cathay Pacific cost 85,000 Alaska miles (return). During the current promotion – which comes along frequently enough – you would pay approximately £1,300 for those 85,000 miles.
Cathay Pacific has no surcharges to be added but, unless we position to the Continent, we still aren’t going to be able to avoid Heathrow’s charges and UK APD (although Cathay Pacific also fly to/from cheaper Manchester and London Gatwick) – this should cost roughly £225 per person.
As a result, you will pay £2,600 to buy 170,000 Alaska miles + £450 in taxes less the £250 rebate from American Express = £2,800 for two return rewards in Cathay Pacific Business Class from London to Hong Kong.
Travel Hacking Option B – Really Commit to Earning Alaska Miles and/or Position to Continental Europe
Why isn’t the Alaska miles option a sure thing? Well, it is when travelling solo… And I suspect that many people would pay extra for the comfort and service of Cathay Pacific over BA’s 8-across Club World.
But my analysis is based on buying 144K Avios at 1p and 170K Alaska miles at 1.53p. That is a serious handicap! But I suspect that few readers would actually buy 144K Avios or 170K Alaska miles… you would travel hack! So whether it’s a Marriott Rewards Travel Package, a simple conversion of Starwood Preferred Guest points to miles or simply crediting paid flights to a specific programme, you can easily bring down the cost of acquiring those precious Alaska miles by diverting some of your usual sources of Avios towards Alaska Mileage Plan. A few months back I wrote about accumulating “exotic” miles such as Alaska miles.
Moreover, the BAPP requires a UK departure (and the associated taxes) and I’ve been generous in comparing like-for-like, even though Cathay Pacific flies to many European destinations, most of which are a short positioning flight away from wherever you are. And, if you think that it’s hard to find two reward seats on the British Airways direct flights to Hong Kong, just imagine how relatively simple it would be to find two seats from anywhere in Europe to Hong Kong on Cathay Pacific’s dozens of daily flights. Unlike departures, there’s no penalty for returning to the UK direct from Hong Kong.
Conclusion
The only reason a companion voucher is even competitive for rewards to Asia is the fact that simply buying Alaska miles is relatively expensive given the post-referendum collapse in the value of sterling. But that shouldn’t stop you from wondering whether the companion voucher is really all it’s cracked up to be, if using a voucher requires paying a substantially higher amount of miles/Avios and surcharges than the competition is charging…
Would you not say you could get a lot better value by having the free ba amex, bagging the bonus avios and when at 10k upgrading to BAPP to get companion voucher then downgrading costing next to nothing in fees and rinse, repeat 6 x Months later so 2 x companion vouchers?
Anyone know if amex would ok this practice:
Open BAPP account and bag bonus avios offer, then downgrade to fee free BA card and later on never 10k spend upgrade again to BAPP?
Just trying to workout how to get 2 x companion vouchers as quickly as possible. ?
I’ll have to leave to Tom and the original BAPP hackers to see whether it works to go from free to paid to free over the space of a few days to trigger a voucher without actually paying much of an annual fee. Something tells me Amex would not be too thrilled, but you never know…
Of course, when doing that you aren’t going to earn the full 1.5 Avios per £, but instead only what the free card gives.
Technically I think you could do it.
However, I regard the upgrade/downgrade per this post as pushing Amex a little. To stretch it to a downgrade/upgrade/downgrade would possibly be pushing it, but quite possibly not.
So you would:
– Take out the BAPP and get the sign up bonus.
– Downgrade to the BA free card to avoid paying the card fee
– Spend £10k then upgrade to the BAPP to get the companion voucher
– Downgrade to the BA free card to avoid paying the card fee.
I do feel a touch uneasy about the last downgrade, which may just be a step too far for Amex (“Sir, I just can’t help but feel you’re taking the piss here”), so if you were prepared to stick with the BAPP for a little while afterwards, I think that may be advisable.
My 2nd strategy:
Fee free BA amex, bag 5k bonus, spend up to 10k.
Upgrade to BAPP, bag companion voucher valid for 2 x years (presume you do not get the BAPP bonus avios by upgrading)?
Downgrade back to fee free BA, spend another 10k, bag 2nd companion voucher valid 1 x year.
Timing will be important with this strategy for flight availability.
The free Amex requires 20k of spend.
When you downgrade back to fee free BA amex do you not take your spend total with you like when you upgraded?
Here I am trying to make the case that you can replicate rewards at a similar cost without companion vouchers… and yet several comments in various posts have been about hacking more vouchers! 🙂
You just can’t wean people off that Companion Voucher Craig… Keep trying 😉
🙂 In part I don’t mind… a bit more reward space for me on Cathay, Etihad, JAL, AA, Iberia etc.
But I remain amazed how BA have trained people to fork over £500+ per person in dodgy surcharges along with more miles than other programmes. All to fly on an airline that offers worse service / hard product in pretty much all cabins. I should just buy shares in IAG instead of blogging about them…
Especially if using companion vouchers for HK, you will be hard to beat the upgrade-downgrade strategy.
Personally, I think that the annual fee is relatively minor when compared to the Avios and surcharges required to actually use the vouchers on a long haul. But if you’ve decided you don’t mind those aspects, then by all means hacking Amex to pay a lower annual fee is something worth trying.
To hit 10k spend to bag companion voucher on BAPP you would get inc bonus 40k avios. Transfer over to fee free BA card and spend another 10k to bag 2nd companion voucher you will receive another 10k avios = 50k avios.
A lot of people can aquire avios for free or very nearly so in my case I could bag 2 x companion vouchers and only pay a little over the fees imposed all in. In regards to the annual fee, I could do 10k easily within 3 x Months so use TCB @ £45 CB would pay for three months pro rata fee making the exercise fee free for me.
I don’t think you can ever have more than 1 voucher whilst holding the free card. But I’m not an expert on that.
I’m also trying to avoid signup bonuses, because for every BAPP sign-up bonus you could be getting the SPG card sign-up bonus or the sign-up bonus from an MBNA card, the Amex Gold card etc. You might think Avios are free from card churning and regular spend – fair enough – but you could also generate loads of Alaska / Singapore / etc. miles from churning the Gold card or the SPG card.
I’m sure I have read lots of posts of people holding 2 x companion vouchers in their baec account even if they don’t have the cards anymore.
I have the spg amex and gold also.
Perhaps, but the vast majority will have had the paid card with the 24-month voucher validity in order to have 2 vouchers.
I’m not saying you’re wrong, I’m just saying it doesn’t sound quite right that your first 10K of spend on the paid card would count towards the 20K spend on a free card., or that you would get a second voucher during the same year as an Amex cardholder.